Colo. bill would legalize gold, silver currency

A 1933 "double eagle" gold coin. / US Mint/AP

DENVER - Colorado State Senators will consider a bill that would allow people to use gold and silver as currency.

A similar measure is already in place in Utah and is being considered in 12 other states, reports CBS Station KCNC.

Supporters are concerned about the strength of the U.S. dollar.

The sponsors of the bill say they are concerned about the strength of the U.S. dollar, public debt, and currency devaluation.

"Over history just about every country in the world that has had a serious debt crisis has intentionally inflated their currency," Sen. Kent Lambert, R, told KCNC's Michelle Griego.

Lambert said that can easily happen in this country, so he's sponsoring a bill that would allow people to use gold and silver coins like cash.

"Coins that are minted by the U.S. government should be something that we can use in trade," he said.

After World War gold and silver coins were banned as currency in the U.S. To use gold and silver coins today they have to be converted to paper dollars. So a $20 gold coin in the 1800s is still legally worth $20, even though its real value may be a lot more.

On Friday gold was trading at more than $1,700 an ounce.

Lambert says if the bill passes people will not be walking around with bags of gold coins, but it's an alternative for them to feel more secure with their money.

[Bren--2008]

I think folks here are confusing price with value. An ounce of gold is an ounce of gold, always and forever; its intrinsifc value does not change. At one time, the purchasing power of the U.S. Dollar equaled the face value of a gold or silver coin. The Federal Reserve Notes (FRN) you carry around in your wallet are not Dollars (refer to Coinage Act of 1792), and have lost about 97% of their purchasing power in a timespan of 99 years. It was designed to do this.

The current FRN price of gold only reflects the current glut of FRNs in circulation (refer to Federal Reserve 'M1' or base money figures for the last five years), as it did in 1980, when gold reached $850/oz. This accounting will happen again, and those of us on the right side of the equation will (mostly) preserve our purchasing power

[Filmguy870]

How does this, in any way, help people "feel more secure with their money"???? What a load of CRAP!!! It's just birthers and baggers blowing smoke.

[kroguej]

Really is anybody going to go into walmart and drop a silver coin on the counter? You can already by silver and gold as a commodity if you are scared of inflation. I would say real estate, stocks, and mutual funds are probably a better place to dump your cash if worried. Having large amounts of cash in bank accounts has never been a great idea anyways.

[kroguej]

PS everybody already ran to gold for fear of inflation so the price of gold is currently inflated.

[kroguej]

***, gold and silver are already trade able commodities. This is just stupid and obviously meant to make a political statement. Are you really going to go into walmart and drop a silver coin on the counter?

[gadfly65]

Once again, Republicans claim to be the defenders of the constitution but ignore it when it suit their extreme agenda. This is a stupid idea based on economic ignorance.

[BWB2020]

What idiots these baggers be.

During the time of the $20 Liberty's issue, the official price of gold was $20.67 an ounce. The gold content of the Double Eagle was fixed at .9675 oz., equaling its $20 value in gold weight.

Now with gold trading at $1700 per ounce, any coins minted from gold would have to either be too small to be practical, (1/3 gram for a 20-dollar coin, 0.0165 gram for a one dollar coin) or in denominations too large to buy anything useful, like food.

Try paying for a six-pack with a $1700 coin, and see what kind of change you get back. Hope you suckers can count dust flakes!

Talk about instant super-inflation.

[venusvegasvada]

Waste of time and money.

[bperk2104]

It's not that the prices of gold and silver are unstable, but rather that the unit of currency that they are priced in is unstable. Relative to other commodities, they have retained their purchasing power over time, which is far more than can be said for the US Dollar (or other fiat currencies for that matter), which is being printed into oblivion and, as a result, has seen its purchasing power steadily eroded in terms of gold, silver, commodities, and foreign currencies. As an example, in 1862, 1 ounce of gold would buy you 18.02 barrels of oil. In 1930, 1 ounce of gold would buy you 17.35 barrels of oil. In 1973, 1 ounce of gold would buy you 17.41 barrels of oil. In 1980, 1 ounce of gold would buy you 22.97 barrels of oil. In 1986, 1 ounce of gold would buy you 20.51 barrels of oil. In 1999, 1 ounce of gold would buy you 21.1 barrels of oil. Today, 1 ounce of gold will buy you 16.55 barrels of oil. On the other hand, oil priced in terms of the US Dollar has risen 1,177% since 1973. In other words, you would need 1,177% more dollars to purchase 1 barrel of oil today than you needed in 1973, whereas one ounce of gold can still purchase roughly the same amount of oil today as it did in 1973 (and in 1862 for that matter). Gold and silver will continue to appreciate relative to all paper currencies. Real interest rates in every single country are negative, after all.

Also, it should be pointed out that what circulates as money today are the irredeemable notes of a private bank, impressed with the statement, "This note is legal tender for all debts, public and private." The Federal Government was given no authority by the Constitution to make anything legal tender. The Federal Reserve Act is unconstitutional (although most everything the Government does is unconstitutional so that argument is probably falling upon deaf ears). Every US Dollar in existence is a liability of the Federal Reserve. Moreover, every dollar that exists today was necessarily borrowed into existence, either via the Fed or through the commercial banks via fractional-reserve lending. This is why there is always substantially more outstanding credit than dollars with which to repay that debt (both the principal and the interest must be borrowed into existence. As a result, whenever the growth in the money supply slows or comes to a halt, defaults begin to rise). Any system that's dependent upon a perpetual increase in debt to sustain itself will ultimately fail under its own weight, and that time is quickly approaching for the US Dollar.

[kroguej]

Really the value of the dollar over the last 4 years hasn't changed a lot and the price of gold skyrocketed over that same period.

[netjunkie1]

What I would do is stop production of one cent coins, they cost 2.5 cents to make.
I would then start a new run of coins valued at 2.5 cents.

[karek40]

There are some numbers (prices) that cannot be reached with a 2.5 cent coin.

[netjunkie1]

It's a set up.
Don't be fooled by this America...
This is a ploy to take advantage of simple minds.