Arizona Gold & Silver "Legal Tender" Act Passes House Committee

We noted earlier that Arizona has introduced a version of the Constitutional Tender Act (the "Legal Tender Act") which was advancing in the Senate; it passed there, and it's advancing now in the Arizona House.

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Arizona lawmakers back gold, silver as currency

Arizona lawmakers say the global economy is on the precipice of financial ruin and the U.S. dollar could soon be worth less than the paper used to make it.

These doomsayers are pushing forward legislation that would declare privately minted gold and silver coins legal tender, no different under state law than the U.S. dollar printed by the federal Department of Treasury.

The measure is Arizona's latest jab at the federal government, which prohibits states from minting their own money. It also reflects a growing distrust of government-backed money.

"The public sees the value in it," said Republican Rep. Steve Smith, of Maricopa. "This is the type of currency we have had over the history of mankind."

The bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property. The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.

The bill would let people use the precious metals as money as long as businesses agree to take them. If made law, it would take effect in 2014.

Democrats oppose the measure. They say it would be a bureaucratic nightmare because businesses don't have the equipment to determine the value of gold and silver.

"This should be addressed by the Federal Reserve and not by the state," said Democratic Rep. Rosanna Gabaldon, of Green Valley.

Keith Weiner, president of the Gold Standard Institute, which supports gold-backed currencies, said he envisions a system where people can pay for goods and services with debit and credit cards backed by gold and silver.

Paper money is a "recipe for worldwide bankruptcy," Weiner told Arizona lawmakers Monday. "Everybody is going bankrupt on this system so we need a sound and honest money system, such as gold and silver."

In 2011, Utah became the first state in the country to legalize gold and silver coins as currency. Lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have debated similar laws in recent years.

Many investors have invested their money in precious metals in recent years as a hedge against the declining value of the dollar. When the value of the dollar declines, gold prices rise.

Gold rose $12, nearly 1 percent, to $1,604.60 per ounce on Monday with news of Europe's bailout plan for cash-strapped Cyprus. Silver inched slightly higher, up 2.3 cents to $28.874 per ounce.

The dollar was up against the euro, the currency used by 17 European countries, as well as the Japanese yen and the Canadian dollar in February.

Proponents of the switch to gold and silver argue paper money is too vulnerable to government manipulations. When central banks boost the amount of currency in circulation to drive down interest rates, the value of that currency relative to others can decline.

"It's actually strange to me that we don't have this already," said Republican Rep. David Livingston, of Peoria.

Gold-backed money fell out of favor during World War I because the U.S. and many other countries needed to print more cash to pay for the war. In 1971, President Richard Nixon formally abandoned the gold standard.

READ THE FULL ARTICLE HERE...

If you live in Arizona, you can voice your opinion about SB 1439 by contacting your Arizona Legislators. For their contact information, visit: http://www.azleg.gov/MemberRoster.asp

Tell your Legislators that this bill is about more than politics - it's about the U.S. Constitution, it's about ARIZONA, and it's about saving the money of the citizens of this State!

Arizona Gold & Silver "Legal Tender" Act Passes Senate Committee

Yet another State has introduced a version of a "Constitutional Tender Act" -- this time, it's Arizona, where the bill (the "Legal Tender Act") basically recognizes that U.S. Minted gold and silver coins ARE legal tender (which, of course, they are, under U.S. law). What that would mean, if this bill becomes law, is that they would NOT be taxed when exchanged for Federal Reserve Notes, since it's nonsensical to tax exchanges of currencies that are legal tender within the same country. (That would be like going to a bank, asking for two five-dollar bills for a ten, and having to pay a 50-cent tax for the exchange!)

While these kinds of bills (like the Utah law passed in 2011) are not "pure" Constitutional Tender Acts, since they only allow for voluntary exchanges of gold and silver coins (rather than requiring the State to use only gold and silver coins in all transactions, as Article I, Section 10 of the U.S. Constitution requires), they are still useful steps towards that ultimate goal of getting back to the Constitution and ending the Federal Reserve from the bottom up.

(To be honest, from a pure Constitutional position, this bill is still unconstitutional, because it states:
1-702(A): Legal tender in this state consists of all of the following: 
1. Legal tender authorized by Congress.
That is in violation of Article I, Section 10, which specifically states that "No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts". This means that no State can make something besides gold or silver a "tender in payment" (which means they cannot "make something else an offer as payment") for any debts -- regardless of whether Congress calls it "legal tender" or not. But let's not be picky at this moment...)

Arizona's Senate Finance Committee voted 4-3 in favor of this bill, so it now goes to the Senate Rules Committee as the next step on the way to a full vote in the Arizona Senate.

By the way, the reporter who wrote the article linked below got it WRONG, as so many reporters often do when discussing Constitutional Tender Bills. Usually, they make the mistake of saying "such-and-such State wants to print their own currency"; this time, the reporter claims that the State wants to make "privately minted gold and silver coins" legal tender. Oh well, at least WE know what's going on...

If you live in Arizona, scroll down to take action in support of this bill!

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Bill before AZ Senate committee called hedge against hyperinflation

February 21, 2013 12:00 am • Howard Fischer Capitol Media Services

PHOENIX - Arizonans who fear the federal government will make their folding money worthless may soon be able to substitute privately minted gold and silver coins.

The Senate Finance Committee on Wednesday took the first steps to making such coins legal tender in Arizona. SB 1439 would give them the same legal status as the bills and coins authorized by Congress.

Nothing in the proposal by Sen. Chester Crandell, R-Heber, would force anyone to actually accept these coins as payment for any debt. Their use would be voluntary.

But proponents said it's only a matter of time before the country suffers hyperinflation, making the greenback worthless.

"We need to have a lifeboat for Arizona so we can construct Plan B," testified Miles Lester.

The measure is crafted in a way intended to get around a provision of the U.S. Constitution that bars states from minting their own coins. But supporters also note it says states cannot "make anything but gold and silver coin a tender in payment of debts."

That, they contend, permits states to recognize coins minted by others.

Crandell said the ultimate bottom line is a lack of confidence in the dollar - or at least the real value of the dollar, what with the Federal Reserve continuing to print new money.

"I think you can see that all over the country," he said. Countries including China are moving to have their own currencies recognized as an international standard "because the dollar doesn't do what it used to do."

But Sen. Steve Farley, D-Tucson, questioned whether something else was at play. He said a similar Utah law adopted in 2011 was pushed by Old Glory Mint, a company that makes these gold and silver coins.

Beyond that, Farley said while the current financial system has its flaws, the country hasn't had the financial panics that occurred regularly in the 19th century.

"I don't see the need to go back to something that has proven to fail," he said.

But Sen. Bob Worsley, R-Mesa, said there may be reason to worry.

"We've never had this amount of debt as a country," he said. And Worsley said if people want the right to use silver and gold coins as legal tender, "I'm OK with that."

Sen. Michele Reagan, R-Scottsdale, said she wasn't going to speculate on the soundness of the dollar. But she agreed to go along, saying, "I don't see where it could hurt, either."

One thing the legislation would do is say taxes incurred by people using these coins "shall be paid proportionately in the same legal tender." Crandell said that is designed to ensure that people are paying only what they owe, without fear of losing value based on some artificial exchange rate.

READ THE FULL ARTICLE HERE...

If you live in Arizona, you can voice your opinion about SB 1439 by contacting your Arizona Legislators. For their contact information, visit: http://www.azleg.gov/MemberRoster.asp

Tell your Legislators that this bill is about more than politics - it's about the U.S. Constitution, it's about ARIZONA, and it's about saving the money of the citizens of this State!