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Silver As Currency

Posted on 2012-11-05, By A-Best Staff

Silver As Currency

By Michelle Smith – Exclusive to Silver Investing News

It’s not only individuals that are seeking safe havens. Increasingly, legislators are showing interest in providing their constituents with safe alternatives to paper money. Over a dozen US states have expressed interest in considering or issuing an alternative currency, and one has already taken a step in that direction with gold and silver coins.

On March 25, 2011, Utah’s Governor Gary Herbert signed House Bill 317, approving gold and silver coins issued by the federal government as legal tender. Recognizing gold and silver as legal tender eliminated certain state tax liabilities such as tax on profits on coins when were viewed mostly as assets.

Last month, legislators in the state of Wyoming voted down House Bill 85, referred to as the Doomsday Bill. The legislation called for a study into the measures the state government would need to take in order to continue operating in the event of a disruption of federal operations. One issue considered under the bill is the “potential effects of the rapid decline of the United States dollar and the ability to quickly provide an alternative currency.”

Though the Doomsday Bill was voted down, it is an indication that the threat of failing currency is a concern within society.

The consideration of alternative currencies by state governments is a subject not without debate.
Eric Freedman, professor at Hofstra University’s law school believes an “economic catastrophe” could result from having competing currencies in the US which “would be the destruction of the country,” Freedman said. It is believed that US states would face major constitutional challenges if they attempted to develop alternative currencies.

Furthermore, offering a currency alternative is perhaps a task that is not best undertaken by lower governments, according to Hugo Salinas Price, President of Mexican Civic Association Pro Silver.

In a presentation for the Cheviot Sound Money Conference in London, Salinas Price said the Treasury is the entity that “could and should” monetize the silver ounce for the UK, suggesting that implementing the use of the metal as a currency should be a federal undertaking.

Silver as currency in Mexico

According to Salinas Price, the only country contemplating reforming its currency on a national level is Mexico. A Congressional bill to monetize the Libertad silver ounce is currently under review with the aims to include the silver as legal tender operating in parallel to the current monetary system.

Salinas Price has presented the case for silver currency in the UK and says he has also tried to encourage it in the US. In Mexico, the silver currency bill has a notable amount of political support and Salinas Price believes that there is a good chance the bill will be signed into law.

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