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Arizona poised to join Utah recognizing gold and silver as legal currency

May 02, 2013194 view(s)

Arizona’s state Senate approved a bill on Tuesday, which will make gold and silver legal currency within state borders if passed by the Governor, CBS News reported.

The Arizona state House of Representatives had already approved the bill, so its last hurdle remains the pen of Arizona Governor Jan Brewer. If she passes it into law, it would take effect in 2014.

To date, Brewer has not indicated her position on the proposal. However, if she approves it, Arizona will be only the second state in the Union that currently recognizes gold and silver as legal currency.

Utah became the first state in the country to recognize gold and silver as legal tender in 2011. In recent years, similar laws have been proposed in Minnesota, Idaho, South Carolina.

Champions of the bill say it’s a guard against inflation, as the value of the dollar declines.

“The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing,” said Loren Gatch, a professor at the University of Central Oklahoma, in an interview withBloomberg News. “There is a fear that the government, or Bernanke in particular and the Federal Reserve, is pursuing a policy that will lead to the collapse of the dollar. That’s what is behind it.”

Gatch referred to the Quantitative Easing policies of the U.S. Federal Reserve, which has been releasing billions of dollars into the economy monthly for several years.

Arizona legislature Democrats who voted against the measure say that it would put a burden on local businesses, forcing their employees to become experts at inspecting gold and silver and detecting fraudulent precious metals. The proposed law does not force businesses to accept gold and silver as compensation, however, it grants them the legal option.

“Gold-backed currency neared obsolescence during World War I as the United States and many other countries printed cash to finance wartime expenditures,” wrote Jake Miller for CBS News. “The gold standard, which pegged the value of the dollar to a specified amount of gold and allowed people to exchange paper currency for gold, was formally abandoned by President Richard Nixon in 1971.”

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