SALT LAKE CITY (Commodity Online) : Nearly a month after Utah became the first state in the United States to officially recognize gold and silver coins as legal currency, many other states are also on the track to legalize gold and silver legal tender.
Earlier this month, Minnesota took a step closer to joining Utah in making gold and silver legal tender. A Republican lawmaker there introduced a bill that sets up a special committee to explore the option. North Carolina, Idaho and at least nine other states also have similar bills drafted.
Utah law also will exempt the sale of the coins from state capital gains taxes. The law is a toned down version of a bill introduced in Georgia last December that would have required that all transactions with the state, including paying taxes, be paid with gold or silver coins.
Although Utah’s new law and similar bills are often sold as providing “options to consumers,” they are widely regarded as a backdoor attempt by conservatives to reintroduce the gold standard.
The United States and many other countries largely abandoned gold-backed money during World War I because they needed to print more cash to pay for the war.
Later, during the Great Depression, President Franklin Roosevelt took steps that essentially prohibited gold and silver as legal currency to prevent hoarding.
In 1971, President Richard Nixon formally abandoned the gold standard.
Fifteen years later, the U.S. Mint began producing the gold and silver American Eagle coins, primarily aimed at investment portfolios and allowing people to trade them at market value but with capital gains taxes on profits.
Utah is now allowing the coins to be used as legal tender while levying no taxes.
Opponents of the law warn such a policy shift nationwide could increase the prospect of inflation and could destabilize international markets by removing the government’s flexibility to quickly adjust currency prices.
