PHOENIX -- Arizonans who fear the federal government will make their folding money worthless may soon be able to substitute privately minted gold and silver coins.

The Senate Finance Committee on Wednesday took the first steps to making such coins legal tender in Arizona. SB1439 would give them the same legal status as bills and coins authorized by Congress.

Nothing in the proposal by Sen. Chester Crandell, R-Heber, would force anyone to actually accept these coins as payment for any debt. Their use would be voluntary.

But proponents said it's only a matter of time before the country suffers hyperinflation, making the greenback worthless.

"We need to have a lifeboat for Arizona so we can construct Plan B," testified Miles Lester.

The measure is crafted to get around a provision of the U.S. Constitution which bars states from minting their own coins. But supporters also note it says that states cannot "make any thing but gold and silver coin a tender in payment of debts."

That, they contend, permits states to recognize coins minted by others.

Crandell said the ultimate bottom line is a lack of confidence in the dollar -- or at least the real value of the dollar, what with the Federal Reserve Bank continuing to print new money.

"I think you can see that all over the country," he said. More to the point, he said countries like China are moving to have their own currencies recognized as an international standard "because the dollar doesn't do what it used to do."

But Sen. Steve Farley, D-Tucson, questioned whether something else was at play. He said a similar Utah law adopted in 2011 was pushed by Old Glory Mint, a company that makes these gold and silver coins.

Beyond that, Farley said while the current financial system has its flaws, the country hasn't had the financial panics that occurred regularly in the 19th century.

"I don't see the need to go back to something that has proven to fail," he said.

But Sen. Bob Worsley, R-Mesa, said there may be reason to worry.

"We've never had this amount of debt as a country," he said. And Worsley said if people want the right to use silver and gold coins as legal tender, "I'm OK with that."

Sen. Michele Reagan, R-Scottsdale, said she wasn't going to speculate on the soundness of the dollar. But she agreed to go along, saying, "I don't see where it could hurt, either."

One thing the legislation would do is say that taxes incurred by people using these coins "shall be paid proportionately in the same legal tender." Crandell said that is designed to ensure that people are paying only what they owe, without fear of losing value based on some artificial exchange rate.

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(5) comments

ascrane
ascrane

What would this do to the current price of gold and silver?

Dr Jerome
Dr Jerome

Senator Farley
You claim the 1800s were more stable than since 1900. Consider what a silver dollar would buy in 1801 with 1901--about the same amount of goods. After the creation of paper dollars in 1913, our money has lost 98% of its purchasing power. Is that what you call stability? and what happened in 2008? A near fail of the banking system. Stop the specious arguments and consider the issue of rising national debt. This is a wise proposal that harms nobody and gives the citizens options.

Eaglewolf
Eaglewolf

Considering that our founding fathers intended for our currency to have value and value was determined as silver and gold, this kind of legislation is way overdue. Until 1964, our dimes and greater were 90% silver. When Nixon closed the gold window, the only thing backing the dollar, became the US Gov. Now the Fed has 3 Trillion in Treasury Debt and is the largest holder of the 16.6 trillion in US Debt. China is now a distant 2nd at 1 Trillion. GO AZ!

Dr Jerome
Dr Jerome

@ ascrane
Absolutely nothing. Prices of Gold and Silver are managed by the Federal Reserve and other central banks of Europe colluding in the futures market--by Ben Bernanke's own public admission.

Fromthemiddle
Fromthemiddle

And people are panicking, (including my President who is playing chicken little) that we will have to "cut" 2.5% of the budget.

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