Inflation has returned to the forefront of American consumer’s minds. After witnessing our fiat dollar depreciate in value by roughly 7.5% over the last four years, there is increasing public awareness of how The Federal Reserve’s weak dollar policies have harmed our economy.
After the consistent failures of several monetary stimulus measures, such as the arbitrary lowering of interest rates and the quantitative easing attempts, a growing consensus has emerged that it’s time to restore discipline to our money supply. While Federal monetary reform remains challenging against a stubborn administration which refuses to acknowledge the damage caused by their loose dollar policies; the good news is states have a strong countermeasure at their disposal through legal tender laws.
In 2011, Utah enacted “The Sound Money and Legal Tender Act”, which gives Utah consumers the option to use gold and silver coins as money. This legislation reaffirms the states right to under Article 1, Section 10 of the Constitution, which reads “no state shall make anything but gold and silver coins a tender in payment of debts.” In order to promote the use of gold and silver as currency, Utah has two available depositories so customers have electronic access to their inflation-proof asset. Since the legislation was signed into law, gold holdings are estimated to have increased by 50%.
There are numerous benefits for states to follow the Utah model and enact legal tender legislation. While the dollar continues to depreciate in value, gold provides individuals with a protected asset that is remarkably stable in value. When Utah consumers obtain precious metals to save or use as legal tender, they can feel the confidence of knowing their money will retain its value in years to come. A recent post election poll discovered that inflation was only 1 point behind unemployment as “the greatest economic concern” for Americans. For these reasons, legal tender laws are the best state solution for restoring market confidence.
Jon Decker is an intern with American Principles Project and a student at Roger Williams College in Rhode Island.