U.S. politicians are rapidly losing faith in the dollar, with more than a dozen states proposing legislation to legalise gold and silver as a currency.
Politicians in Colorado concerned about the nation’s financial stability are the latest to push a bill to legalise gold and silver coins as usable currency.
But from a consumer angle the conservative bill would not lead to people carrying gold nuggets in their purses and would have little practical effect.
The GOP proposal reflects anxieties about the domestic consequences of the European debt crisis and chronic deficit spending in Washington D.C.
‘There are lots of concerns about the U.S. monetary system,’ said the bill’s sponsor, Republican Senator Kent Lambert of Colorado Springs.
‘There’s no way to maintain the value of anything if countries start a race to the bottom by inflating their currency to get out of debt.’
GOP presidential candidate Ron Paul believes the U.S. should return to the gold standard, so paper currency is guaranteed by precious metal.
‘I am not a Ron Paul kind of guy,’ Senator Lambert said. ‘But that’s something I think is very legitimate that he brought up.’
Utah legalised gold and silver as a currency option last year. Politicians in more than 12 other states have proposed similar legislation on currency.
Rich Danker of Washington-based conservative think tank the American Principles Project favours a return to the gold standard.
‘These bills offer a sound monetary alternative to the U.S. dollar,’ he said. ‘They allow people to store their wealth in coins that will not decrease in value.’
The Colorado proposal faces long odds. People who want to spend gold and silver coins currently have to convert them to paper dollars first.
Gold and silver coins made by the U.S. Mint are mostly used for investment portfolios. People can trade them, with capital gains taxes on profits.
Senator Lambert’s bill is designed to provide consumers alternatives in case the dollar falls badly. It would not make merchants accept nuggets of gold and silver as payment.
Colorado has a rich mining history, and its gold and silver caches helped finance construction of the state Capitol in the 19th century.
The state no longer keeps reserves of gold nor silver, although gold and silver bullion are kept at the U.S. Mint in Denver, near to the Capitol.
The bill cleared a Senate committee and awaits a vote in the full chamber.
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