Push to Bring Back Gold Standard Intensifies

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Starting in May, Utah residents will be able to shop
in a currency other than the dollar — gold,
something that hasn’t happened since 1933.

Utah became the first U.S. state last month to
recognize gold and silver coins minted by the federal
government as legal tender. More than a dozen other
states are considering similar measures, and are
expected to follow Utah’s example. The move,
proponents say, is caused by declining faith in the U.
S. monetary system and concern about rising
inflation.

The gold standard, a monetary system in which the
dollar is valued against a certain weight of gold,
lasted until the Great Depression, when the Federal
Reserve confiscated gold held by the public.
President Nixon abolished the conversion of dollars
to gold at a fixed rate in 1971.

It doesn’t literally mean people would pull out gold
coins at the cash register. Instead, the Federal
Reserve would be required by law to make their notes
redeemable for gold and hold gold coins and bullion
as reserves. The printing of U.S. dollars would also
be weighed against the value of gold.

The last time the gold standard was seriously
considered was during President Ronald Reagan’s
administration. Reagan appointed a commission in
1981 to study the role of gold in the U.S. monetary
system, but the group mostly came out against it –
except for two members, including now-Rep. Ron
Paul, R-Texas, a champion of the Tea Party movement.

Despite continued calls by proponents like Paul to
consider the gold standard, it had mostly stayed
under the radar, until now.

The Tea Party‘s growing momentum and rising
inflation is giving new life to the issue, as evident in
Utah.

“We are just now starting to see some interest. These
actions by state legislatures are mostly symbolic –
declaring that people can use a one-ounce federally-

minted gold coin at its face value of $50 doesn’t
really give people a reason to do that. But it’s a
statement by the state legislators that they are
concerned by the state of the dollar,” said Lawrence
H. White, a professor of economics at George Mason
University who has published several reports on the
topic.

State lawmakers are “concerned about the future of the
dollar, worried that [worse] inflation is coming,” White
said. “People need to have an alternative if the dollar
melts down.”