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SALT LAKE CITY — The increasingly less valuable dollar has some Utah lawmakers and monetary reform proponents pushing for an alternative form of currency.
A number of contributors from finance, politics, law and economics participated in the Utah Monetary Summit Monday on the University of Utah campus.
The day-long conference included various panel discussions dedicated to examining the current status of our nation's monetary system and what individual states could do to strengthen their own financial well-being.
"Our money is losing value," said Rep. Ken Ivory, R-West Jordan. "The value of (our) money is openly fluctuating all the time."
People who have saved money for their retirement all of their lives are finding that the value of their savings is "disappearing out from under them," he said.
"As stewards of our state, it is our responsibility to make sure that we develop a way to preserve the purchasing power of our earnings and savings," Ivory said.
The idea of monetary reform in Utah was spawned by state Rep. Brad Galvez, R-West Haven, who sponsored the Utah Legal Tender Act to largely serve as a protest against Federal Reserve monetary policy.
Galvez said Americans were losing faith in the dollar. If you're mad about government debt, ditch the cash. Spend your gold and silver, he says.
Our money is losing value. The value of (our) money is openly fluctuating all the time.
–- Rep. Ken Ivory
This summer, Utah became the first state in 40 years to make gold and silver legal currency. The "Utah Legal Tender Act" took effect in June, changing how gold and silver are classified under the state tax code.
Previously, gold and silver were classified as "assets," making precious metals subject to state and federal capital gains taxes when exchanged for cash. Under the new law, silver and gold are now considered "currency," eliminating those tax issues at the state level. However, federal taxes would still apply.
Galvez said his idea was not to return to the gold standard — though he believes that would a good idea — when the dollar was backed by gold instead of government goodwill. Instead, he would like to create options for consumers.
"This will move us toward an alternative currency," Galvez said.
In May, Minnesota took a step closer to joining Utah in making gold and silver legal tender when a Republican lawmaker there introduced a bill that set up an exploratory committee to examine the option. North Carolina, Idaho and at least nine other states also have drafted similar legislation.
The U.S. and many other countries largely abandoned gold-backed currency during World War I because they needed to print more cash to pay for the war effort. Later, during the Great Depression, President Franklin D. Roosevelt took steps that essentially prohibited gold and silver as legal currency to prevent hoarding.
Then in 1971, President Richard Nixon formally abandoned the gold standard.
Summit organizer Larry Hilton said the purchasing power of the dollar has declined significantly over the past century and something needs to be done soon to remedy the situation.
"We need to give people the option to have an alternative," he said. "We're not trying to revamp the existing system, (but) let's put other choices on the table and everything will be stronger as a result."
While the idea of alternative currency is not widely supported right now, proponents believe the movement is gaining momentum and may soon be an issue of major economic importance.
"This is a step in preparedness, a step in security that allows us to be able to help hold up our economy as the dollar continues to shrink," said Galvez.
Email:jlee@ksl.com
