Imagine paying your next parking ticket in gold Krugerrands or renewing your driver license using American Gold Eagles.
A proposal in the Utah Legislature would require the state to allow just that, requiring government agencies to accept gold for transactions, and creating a parallel monetary policy for intrastate commerce tied to the price of gold.
Under the legislation that has been drafted, Utah residents could mint their own gold or silver coins, a storehouse would be created to stockpile the precious metal and the Utah Defense Force, an arcane state militia that may be called and armed by the governor, would be responsible for securing the inventories.
“I think it has merit,” said Rep. John Dougall, R-Highland, who had the proposal brought to him by a constituent and committed to opening a bill file. Another representative will probably end up sponsoring the legislation.
“Fundamentally, what it comes down to is people’s concern about the fundamentally reckless policies at the federal reserve and what it does long-term to the financial standing of the country and giving folks another choice of monetary tools for their financial transactions,” Dougall said.
The concern is that the large U.S. debt and policies designed to increase liquidity by putting more dollars in the market have devalued the national currency.
“It’s really about creating an option,” said Larry Hilton, an attorney and insurance salesman who authored the “Utah Sound Money Act” and took it to Dougall. If the dollar falters, he said, it would be beneficial to the state to have an alternative.
“It’s not intended to be compulsory in any way,” Hilton said. “The state is offering to taxpayers, ‘If you want to pay your taxes in gold or silver, we’ll accept them.’ ”
Investing in gold has been pitched as an anchor during the recent economic turmoil. Rep. Ron Paul, R-Texas, has warned of the devaluation of the dollar for years, and conservative radio personality Glenn Beck plugs gold on his program as a hedge against inflation.
If it is enacted, the government would be required to transact any intrastate business in gold if that’s the citizen’s preference. Businesses could, if they choose, also accept gold as a form of payment.
Utah State Treasurer Richard Ellis said he hasn’t seen the bill, but it raises some questions on how the state would comply.
Since gold coins aren’t a standard currency, he said, he had questions about how the state would comply and how, for example, it could give change on a transaction. “Do they chip off a chunk of an ingot?” he asks.
Presumably, Ellis said, there would need to be extra security and he would have to talk with the banks about how they would look on the state doing business in gold and silver.
As treasurer, Ellis would be assigned the task of setting the exchange rate for Utah’s gold and maintaining a registry of gold and silver coins that would be recognized by the state. Coins could be privately minted if they meet certain standards.
The governor would be required to muster the Defense Force — which is authorized in state law — to protect and transport the state’s gold holdings.
The bill envisions “commerce cooperatives” that could be created to act like banks, to store the gold in Fort Knox-like caches and facilitate the gold transactions.
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