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Is the American Dollar still as Good as Gold?

Gold vs. Dollar

Apparently, the Utah legislators don’t think so, since they have a bill in the house proposing to make “Gold” and “Silver” legal tender and will exempt the sale of the coins from state capital gains taxes.

If the law passes, Utah will become the first state in the country to legalize gold and silver coins as currency.

Craig Franco believes that you should store your gold and silver coins in a vault, and he will issue you a debit-like card to make purchases backed by your holdings. Mr. Franco plans to open for business June 1, likely the first of its kind in the country.

The idea to make gold and silver legally tender, was spawned by Republican State Rep. Brad Galvez, who sponsored the bill largely to serve as a protest against Federal Reserve monetary policy. Galvez says Americans are losing faith in the dollar. He also states that he is not trying to replace the dollar, but rather, give consumers an option to the dollar.

However, even if the bill is passed and gold and silver becomes legal tender, merchants are not required to accept the coins.

Matt Zeman, market strategist for Kingsview Financial in Chicago, expects more people will start investing in gold as America’s growing debt and bankruptcies in other countries continue to decrease the value of government-backed money.

“Making gold and silver coins legal tender sends a strong signal to Congress and the Federal Reserve that their monetary policy is failing,” said Ralph Danker, project director for economics at the Washington, D.C.-based American Principles in Action, which helped shape Utah’s law. “The dollar should be backed by gold and silver, so we have hard money.”

Minnesota, North Carolina, Idaho and at least nine other states also have similar bills drafted.


May 23, 2011 - Posted by | Business News | , , , , , , , , ,

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