According to Article 1 Section 10 of the Constitution
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
However, when was the last time you paid for anything in gold or silver? This table shows the current status of states that have passed or proposed laws to make gold and silver legal tender.
Passed in Senate April 2013 and the House on April 8, 2013. SB 1439, the Constitutional Tender Act, which allows businesses and the state government to accept payments in gold or silver was eventually vetoed by Governor Jan Brewer.
On February 14, 2014 a new bill (SB1096) passed the Senate by a vote of 18-12 and is awaiting a vote by the House.
Senate Bill 12-137 killed by Senate democrats in March 2012.
Introduced February 17, 2009.
Passed April 2012.
Introduced January 2013.
Cited in the news but cannot confirm.
Introduced May 2011.
Passed April 2012.
Rejected by 20 Republicans and 32 Democrats in March 2011.
Introduced January 2011.
Introduced March 2011.
Passed in the state Senate on March 11, 2014 by a vote of 37 to 4. Senate Bill 862 (SB862) is now waiting to be voted on by the House.
Here’s a great chart from the Cato Institute, which depicts 56 cases of hyperinflation in modern times. Hungary wins the prize for having the highest monthly inflation rate of 4.19 X 1016% -that’s 41,900,000,000,000,000% or 41.9 QUADRILLION PERCENT.
I think one of the more interesting points in the table is the time required for prices to double. Can you imagine the price of food doubling ever day? How about every 15 hours?
Many people who don’t understand the concept of sound money say you can’t eat gold. In fact, in just about every discussion on the internet concerning monetary collapse, there is always at least one troll saying you can’t eat gold. Guess what: you can’t eat paper money, stocks, or ETFs either. But I bet if you live in Zimbabwe, you can get a lot of eggs for a silver coin. And the next week, you can buy the same amount of eggs for a silver coin. However, if you’re using Zimbabwe dollars, you might need an extra wheelbarrow of paper dollars to buy the same amount of eggs you purchased the week before.
Thank goodness the central bank of Zimbabwe printed one-hundred trillion dollar bills, so Zimbabweans no longer have to carry their money in barrels, like the Germans did in 1923.
On the other hand, the Germans could use their worthless, paper money to keep the kids entertained…
…or heat their homes.
Note, by the way, that when speaking of the German case of hyperinflation between June 1921 and January 1924, Germany is often referred to as the Weimar Republic. To clarify: The Weimar Republic was not some obscure neighbor or German annex; the Weimar Republic was in fact Germany. The Weimar Republic is simply a name historians use to indicate a point in time (in 1919) when Germany changed its form of government.
To devalue a currency, like the dollar, means that the value of the currency decreases. In the case of the dollar, we call this dollar devaluation. The value of a currency is also referred to as purchasing power. The more a currency is devalued, the less you can buy with it because the purchasing power decreases.
How much has the dollar devalued since 1913
The graph below shows the purchasing power of the US dollar since 1913. 1913 is when the Federal Reserve, which is actually a privately-owned central bank, took over the US banking system. As you can see, it’s been pretty much downhill since the Fed took over. In fact, the dollar has lost over 96% of its value. That means today’s dollar would be worth less than 4 cents back in 1913. How much longer will the dollar maintain its reserve-currency status at this rate?
How does the Federal Reserve devalue the dollar? By printing more money. Printing more money causes monetary inflation. That means there are more dollars in circulation, but just because there is more paper money floating around, that doesn’t mean value has been created. All you really get is price inflation. Here’s an extreme example: Let’s say the Federal Reserve just gave everyone in America $1 million. Wouldn’t that be great if everyone in America became a millionaire overnight? Unfortunately, nothing would change, except prices would increase. Think about it. How much would you have to pay the plumber to come to your house, if he’s already a millionaire?
Unlike paper money dollars, which can be printed out of thin air, gold does not lose value. In fact, gold doesn’t really go up or down. When gold goes up, it really means the dollar is going down and when gold goes down, it’s actually the dollar getting stronger (increasing its purchasing power). So by keeping a portion of your savings in gold, you offset the losses of your dollar being devalued by the Federal Reserve and reckless government spending. When you buy gold, silver or other commodities that resist inflation, it’s called a hedge against inflation.