A bill signed into law on April 11 makes gold and silver legal tender in Arkansas, USA, allowing citizens to use gold and silver coins to pay debts. The bill also clarifies that gold and silver “specie” (coins) are not considered property for tax purposes, and transactions using these precious metals are not subject to taxation.
Arkansas adopts gold and silver as legal tender
Arkansas has moved to make gold and silver legal tender within its territory: on April 11, Arkansas Governor Sarah Huckabee Sanders signed the“Arkansas Legal Tender Act,” which makes gold and silver “specie” (any kind of bullion or coins) can be used in payment of debts, it explicitly mentions.
The Act also provides that “no positive coin or legal tender shall be characterized as personal property for taxation or regulatory purposes” and that “the purchase, sale, or exchange of any kind or form of positive coin shall not create any tax liability.”
The law will take effect 90 days after its approval by the legislature on April 7, making Arkansas the fourth state, after Wyoming, Oklahoma, and Utah, to designate previously approved gold and silver coins as legal tender.
More states will approve an alternative currency to the U.S. dollar
According to the Tenth Amendment Center, a federalism advocacy group, 23 states are currentlydevelopingregulations that would also allow their citizens to use gold and silver as legal tender. Michael Malahay, communications director of the Tenth Amendment Center, believes this is an initiative to weaken the authority of the U.S. Federal Reserve,pointing outthat states are “nullifying the Fed state by state.”
The theory behind this idea is that “in a multi-currency environment, the superior currency takes precedence.” In this sense, Professor William Green, an expert on constitutional law, explains:
In time, when the residents of a state begin to use both Federal Reserve notes and silver and gold coins, the fact that gold coins retain their value better than Federal Reserve notes may lead to a situation in which good money (gold and silver coins) displaces bad money ( Federal Reserve Notes) will have the “reverse Gresham’s Law” effect of driving out the bad money (Federal Reserve Notes).
The argument for gold and silver as legal tender has been around for a long time, and experts say that this possibility is enshrined in the U.S. Constitution, which states that “No state… . shall make anything but gold and silver coin a tender for the payment of debts.” Market analysts like Peter Schiff predict a gold bull market is coming and “it will be spectacular.”
Image credit: Shutterstock, Pixabay, Wiki Commons