Gold, Silver Become Legal Tender

Written By Brian Hicks

Posted April 9, 2013

Those who view gold and silver as safe havens have a lot to be excited about at the moment. Now, push for the precious metals is getting even stronger. 

According to Bloomberg, citizens in a number of states are pushing for legislation that would make gold and silver bullion legal tender. The first state to enact such legislation was Utah, which passed a bill in 2011 that served to authorize gold and silver bullion as currency.

Arizona, South Carolina, and Kansas are all following suit, each of which is on the forefront of a movement that could easily extend far beyond what has occurred thus far.

In an initial bout of legislation, the Arizona House gave approval of a bill that would serve to make gold and silver bullion practically no different than the paper dollar, even if the metals are privately minted.

Under the bill, the bullion would not be taxed or regulated as property, and it would even be able to be used for exchange as currency in 2014 if local businesses agree to accept it.

A Growing Distrust 

It isn’t that much of a mystery why these states are so heavily focusing upon gold and silver as potential forms of usable currency in the future. Between the bailout in Cyprus and quantitative easing in this country, many are concerned over the potential future of the American dollar.

gold and silver coinsSome even fear it could potentially collapse. If bullion were to be used as currency, it could protect against inflation and prove to be a safe haven for investors.

It’s important to note that measures to recognize bullion as legal tender are really more symbolic at the moment than they are practical. After all, it’s not as if one will be able to take a gold coin down to a department store for a new pair of shoes once bills are passed. 

Rather, the move is meant specifically to show that distrust over government-regulated currency is at a peak, whether it be due to issues that have occurred in Cyprus, the Eurozone, or even America itself.

Gold as legal tender would not only help to protect against inflation, but it would actually have a rather large impact on taxation as well. If gold bullion was to be used as a form of legal currency, it wouldn’t be taxed in the same way as the American dollar.

Many investors and those who are simply careful with their money find this to be strong reasoning for a push towards gold and silver bullion as currency.

Thoughts For Investors

It’s not difficult to understand why many people are pushing towards the use of privately minted precious metals as currency, especially given the economic climate of America today.

Growing fears over government regulation of currency have been omnipresent as of late, many of which come down to the decisions made by Federal Reserve chairman Ben Bernanke.

Bernanke’s attempts to support economic growth through measures such as quantitative easing have pushed interest rates close to zero since December of 2007, according to Bloomberg. Each month, the Federal Reserve purchases $85 billion in securities, which has grown its assets and pushed them beyond $3 trillion. 

Quantitative easing has had a huge effect on not only the price of gold, but also on the interest in it as an investment opportunity. Since many believe the program could put the future of the American dollar in jeopardy, investors are doing everything possible to look towards other options that might add security to their portfolios.

While gold prices and numbers have not been exceptional as of late, many believe that the the metal will once again move into bullish territory by the end of the year. For more suggestions on how to invest in gold can be found here.

It’s fair to say that it will be some time before the metal can actually be used as physical currency—even in states where it has been recognized as legal tender.

The fact remains, however, that scrutiny over government regulated currency is likely to continue, which makes an even better case for gold, silver, and other metals for the years to come.  


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