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Friday
Apr222011

Introducing the Utah Sound Money Act - An Idea Whose Time Has Come

Chart - see in full size at Jesse's Cafe Americain

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An Idea Whose Time Has Come

Source - 10th Amendment Center

Introducing the Utah Sound Money Act

In 1980, Zimbabwe became a sovereign African nation, gaining its independence from the United Kingdom.  At that time, their dollar was valued at a higher rate than the U.S. dollar, at a rate of 1 to 1.25.  Earlier this decade, President Mugabe—in power since 1987—began to fulfill a long-standing campaign promise to equalize land ownership, through a campaign called Fast Track Land Reform.  While white Zimbabweans constituted less than 1% of the population, they owned around 70% of the land.  In 2000, Mugabe began to seize and redistribute land owned by whites to black Zimbabweans.

The economy quickly tanked in response to these moves, as well as the resulting sanctions imposed by several Western nations.  That year it declined by five percent, then by eight percent in 2001, then twelve percent in 2002.  Inflation quickly surpassed normal percentages and increased into the tens, then hundreds, then thousands, and then like an asymptote, skyrocketed towards infinity.  At its highest rate, Zimbabwe’s inflation reached a monthly high of nearly 80 billion percent.

I carry in my wallet one of the most potent objects that can be used in teaching others the nature and importance of sound money: a 100 Trillion Zimbabwe Dollar note—the highest amount ever printed. (Get your own!)

In the months prior to the collapse of their currency, Zimbabweans began using foreign currencies as a more stable medium of exchange.  The government was quickly forced to legalize such alternative currencies, first licensing hundreds of businesses to sell their wares in foreign currency, and later suspending their currency altogether, legalizing the foreign currencies themselves for use in the country. Gold has become a coveted commodity as individuals look for a more reliable currency with which to engage in commerce.

Zimbabwe is just the latest of a long string of failed fiat currencies. A currency need not undergo hyperinflation, however, to be rendered worthless. Since its inception in 1913, the Federal Reserve Note (“U.S. Dollar”) has lost 96% of its value through a steady (and sinisterly mis-reported) inflation.

As with Zimbabwe, countries with central banks seek to enforce their monopoly on creation (counterfeiting) of the official currency through legal tender laws. In other words, alternative currencies are outlawed as a medium of payment; the legalization of competing currencies would, through the open market, result in the government losing its monopoly and ending up with a “continental”-like pile of paper with little to no value. (So concerned were the early leaders of the United States with this issue [they had learned from personal experience] that the U.S. Coinage Act of 1792 instituted the death penalty for anybody found counterfeiting the currency.)

Whether hyperinflation is in the future for the Federal Reserve Note or not, its eventual demise is near certain. Positioning ourselves through preparation and wise financial management to proactively respond to such events on the horizon is wise counsel—should not the same apply to our government?

Last year, Rep. Ron Paul (R-TX) introduced the Free Competition in Currency Act which would, in his words, “allow[] for competing currencies [which would] allow market participants to choose a currency that suits their needs, rather than the needs of the government.” Gold, silver, or any other form of currency would be acceptable, under this proposal, for engaging in commerce.

While we wait for the federal government to do nothing to stem the tide of Federal Reserve Notes that will likely soon capsize our ship of state, states can, like individuals, position themselves to proactively prepare for any problem with the dollar, rather than later be forced to react under troublesome circumstances. Article I Section 10 of the U.S. Constitution says that “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts…” Additionally, no power was delegated in the Constitution to allow for the federal government to make anything but gold and silver coin a legal tender for commerce. That this limitation has long been ignored is no excuse for its ongoing abuse.

In the 2011 general legislative session, Utahns will have an opportunity to position themselves and their state on better financial footing by infusing the system with sound money—to the degree that willing participants choose to use either gold or silver as alternative currencies. The Utah Sound Money Act will soon be introduced to initiate this opportunity.

This bill is designed to reinstate gold and silver coin as an optional medium of exchange for use in commerce within the state of Utah. It nullifies legal tender laws for intrastate commerce, recognizing the inherent, inalienable right of individuals to engage in specie-based exchanges with each other on mutually agreeable terms. You can read the bill here (PDF).

The bill goes further. Among other things, it:

  • exempts gold and silver from sales and capital gains tax when used in intrastate commerce;
  • provides standing for Utah court declaratory relief from intrusive federal regulation;
  • outlaws searches and seizures, as well as disclosure, of gold and silver coin without a lawful warrant from the county sheriff;
  • makes use of the long-defunct Utah State Defense Force to store, safeguard, protect, and transport Utah’s specie holdings;
  • allows any Utah taxpayer to discharge his/her financial obligations to the state government in gold or silver coin, should they so choose;
  • establishes cooperatives (LLCs) to facilitate and promote intrastate commerce using gold and silver coin; and
  • allows for this increase in liberty at no direct nor initial cost to the state of Utah.

This bill does nothing to the federal government’s use of Federal Reserve Notes and monopoly over creating that fiat currency. This bill does not impose a gold standard, nor remove the dollar as a legal tender to be used in commerce. This bill does not do anything, really, other than increase the liberty of each individual to determine how they would like to engage in commerce, and with what currency.

On what rational grounds can an idea like this be opposed?

This is not to say that the language or implementation of the bill is perfect. I’ve had the opportunity to review the draft for several weeks and offer input to the author, and I have to say, the bill is fairly solid. Nonetheless, improvements may yet be suggested and incorporated—and that would be a good thing. But considering the state of the dollar, the liberty-suppressing imposition of legal tender laws, and the stranglehold over commerce (interstate or otherwise), this idea is one whose time is come.

Ayn Rand’s quote on gold speaks many truths about our current situation:

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims.

This bill seeks to impose a protecting shield around those who wish to voluntarily engage in commerce under its provisions by defending against the destroyers whose counterfeiting operations oppose any competition. For the sake of our liberty—even if you have no desire to use gold or silver—this bill should be supported by all Utahns who have the remotest of concerns about preserving our wealth and staving off financial ruin.

*******

You can download the Constitutional Tender Act template here:
http://www.tenthamendmentcenter.com/legislation/constitutional-tender/

Track Constitutional Tender legislation in the states at this link:
http://www.tenthamendmentcenter.com/nullification/constitutional-tender/

*******

Connor Boyack [send him mail] is the state chapter coordinator for the Utah Tenth Amendment Center. He is a web developer, political economist, and budding philanthropist trying to change the world one byte at a time. He lives in Utah with his wife and son. Read his blog.

Copyright © 2011 by TenthAmendmentCenter.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

 

 

 

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Reader Comments (12)

Meet Don Brownstein: The Physics Professor Who Just Became The Best Hedge Fund Manager Of The Year

http://www.businessinsider.com/don-brownstein-2011-1
Jan 7, 2011 at 4:16 AM | Registered CommenterDailyBail
Those Four Guys Who Started A Hedge Fund Right Out Of College Did Pretty Well In 2010

Read more: http://www.businessinsider.com/rebellion-research-performance-spencer-greenberg-alexander-fleiss-2010-2011-1#ixzz1AL6OXVPO
Jan 7, 2011 at 4:16 AM | Registered CommenterDailyBail
It's Official: Obama Chooses A JP Morgan Banker To Be His New Chief Of Staff

Read more: http://www.businessinsider.com/obama-chooses-william-daley-to-be-chief-of-staff-2011-1?sailthru_m=h2c#ixzz1AL6usMfz
Jan 7, 2011 at 4:18 AM | Registered CommenterDailyBail
Bill Daley as Chief of Staff? Let the lease deals begin:

http://www.bloomberg.com/news/2010-08-09/morgan-stanley-group-s-11-billion-from-chicago-meters-makes-taxpayers-cry.html

http://www.chicagobusiness.com/article/20100731/ISSUE07/307319987/chicagos-lousy-parking-meter-deal-becoming-more-and-more-galling#axzz1ASN55nrg

And, quoting John Kass:

"Washington reporters hoping to maintain favor with the Chicago gatekeeper would be advised to stay away from the following topics while researching the glowing puff pieces to come."

"Don't ask about Billy at Fannie Mae and his little buddy Rahm at Freddie Mac in the 1990s, or how that huge SBC deal went through in Illinois in 2003 when Billy was SBC president."

"Don't ask about those meetings back in Chicago, in the early 1990s, when Billy and family adviser Tim Degnan and others helped create those City Hall patronage armies — which were later involved in illegal hiring — to keep Rich Daley in power and elect allies like Emanuel to Congress."

"And for Pete's sake, never ask about the Chicago Way."

http://www.chicagotribune.com/news/columnists/ct-met-kass-0107-20110107,0,7721720,full.column

Needless to say, we can all look forward to advances in the important cause of bipartisanship:

"All week, Stuart Levine, the Republican snitch who loves his gladiator movies, has been telling the story of Illinois."

"He tells it from the witness stand in federal court, weaving the tale of this political boss and that political boss, that Democrat, this Republican, all working together for the common good."

"He means, the good stuff in their wallets."

http://articles.chicagotribune.com/2008-03-23/news/0803220254_1_illinois-sen-peter-fitzgerald-combine

Frank
Jan 8, 2011 at 10:59 AM | Unregistered CommenterFrank
Sorry about my momentary confusion between JP Morgan and Morgan Stanley.. There's no evidence that Bill Daley had anything to do with the infamous parking meter scheme.

Too bad. Billy might have put his arm around his brother and asked "Richie, why ya lettin' Wall Street screw da city again?"

Frank
Jan 8, 2011 at 12:37 PM | Unregistered CommenterFrank
great links frank..thanks...
Jan 9, 2011 at 12:59 PM | Registered CommenterDailyBail
Those 100 Trillion notes are now deemed "Bernakie Bucks"....AB
Apr 22, 2011 at 6:58 PM | Unregistered Commenterain't bullshitt'n
Yoiu forgot to say that:

There wre some blacks that were enterprising and knew their business,k and started planting and producing crops.

BUT Mugabe and his Zimbabwe military would come and destroy those crops...countrywide..
Everything was destroyed, every type of production, DELIBERATELY!

Eventually, there was NO FOOD or ANYTHING OF VALUE to be had or to export.
Apr 23, 2011 at 12:02 PM | Unregistered CommenterBonnie
The act of taking property from the 1% and giving it to the 99% does not provide a direct correlation between the wealth redistribution and inflation. Inflation was a consequence of sanctions. Any country that has to endure economic sanctions will experience inflation. The story of Zimbabwe is the story of the consequences of what happens when you try to destroy a social monopoly. Much of the same situation exists in America and if the many try to take away from the few, the many will be dealt the same consequences.
Apr 23, 2011 at 2:13 PM | Unregistered CommenterJessie
Lastly, Gold and Silver as a currency is the stupidest idea in the world. Firstly, what is money. Money is a medium of exchange between labor, goods and services. Money is not a store of value. The value is in the labor, good or service not the medium itself and it shouldn't be because if the value is in the medium itself, then the medium becomes stored instead of exchanged which stunts economic activity. Investments are stores of temporary value whose future exchangable value is predicted to remain stable or increase in money value. If you combine money and investment instruments you will get speculation without natural incentive to correct it (which is what we have now in the form of Federal reserve notes). You will also not correct the social alignment or socio-economic classifications that institutionalize materialistic pursuits that have corrupted our current society.

To sum it up, if gold and silver is money then all that will happen is the rich will either crash the price such that current investors lose big and that potential investors no longer want to purchase or they will raise the price so high that only the rich can afford the commodity, there would be a transition period where current gold and silver investors would cash in there commodities and afterward the rich would still be in power and nothing would have changed.

Instead have the Treasury print treasury notes backed only by the faith and credit of the US government. You want to scare the rich propose the Treasury have the same power as the Federal Reserve. You don't scare them by changing the pieces on the chess board because at the end of the day you are still playing chess. You win the game by stopping it entirely.
Apr 23, 2011 at 2:33 PM | Unregistered CommenterJessie

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