Utah and Other American States Tempted by Return to Gold Standard

In the United States, the gold standard has been reestablished and we missed it… OK, let’s not exaggerate, but in the U.S. — where the equality between gold and dollar was abolished on Aug. 15, 1971, the day President Nixon threw the Bretton Woods regulations out of the window, stating “there is no longer any need for the United States to compete with one hand tied behind her back” — the dollar has been the sole currency of reference ever since. However, a year ago in May 2011, Utah legislators passed a law that establishes gold and silver coins as legal money in their state. For good measure, they also exempted from taxation all commercial transactions that are backed by these metals.

The promoter of this idea, a local original named Craig Franco, intended to preserve Utah from the growing mistrust of Americans toward their currency, and thus act as a rescuing precursor. Along came a member of the Utah House of Representatives, Rep. Brad Galvez, who took up the idea and convinced his peers to pass that law. Gov. Gary Herbert, Republican and Mormon, just had to sign it.

Of course, neither gold nor silver have replaced the greenback in that state for the time being. And the share of these metals in the local commerce remains so tiny that nobody in Utah’s public administration is able to provide exact numbers on their representation. It’s not surprising; from the outset it was a primarily symbolic act, save for Franco maybe, who, remaining true to himself, opened a gold and silver commerce in Salt Lake City.

Thus, the idea catches on. South Carolina’s House of Representatives has adopted a similar text, which has yet to pass the State Senate, though. In other states, such as Tennessee, Georgia, Colorado, Iowa and Minnesota, there are representatives who are working to convince their colleagues to come up with legislation that would reestablish the gold standard.

In fact, the dream of restoring the legitimacy of the precious metal on U.S. territory is essentially shared by the Libertarian movement which goes all the way in promoting the logic of a small government confined to a regulatory minimum — the economy in general and money in particular not being part of its prerogatives. For years now, the movement’s political figure head, Republican Congressman Ron Paul, has been expressing loudly his desire to see the Federal Reserve abolished, or for lack of better options, to abolish at least its monopoly on printing money.

Addressing the skeptics, hasn’t the website that supports Paul during the Republican primaries written under its champion’s name his favorite slogan “Peace, Gold, Liberty”? A man of sincerity, Paul is ready to acknowledge that he doesn’t care two hoots about replacing the primacy of the dollar with gold. As far as he is concerned, silver, platinum or opal could do the job as well, as long as the essential remained secured — to prevent a non-elected institution, the Fed, from printing dollars willy-nilly.