Utah’s Step-By-Step Strategy in Support of Sound Money

Utah’s Step-By-Step Strategy in Support of Sound Money

 

 

By Mike Maharrey

 

“End the Fed” is a popular slogan among supporters of sound money, but it’s almost certain that Congress will never shut down its own money printer. So, as the Founders repeatedly advised, it’s up to the people of the states to get the job done.

 

Since 2011, people in Utah have been doing just that – step by step. A combination of at least four state laws, plus plenty of steps forward by businesses and individuals has built what is likely the most robust foundation for the advancement of gold and silver as money in the United States.

 

The Founders and Old Revolutionaries understood this incremental approach and used it to great success. As Thomas Jefferson wrote, “The ground of liberty is to be gained by inches …We must be contented to secure the liberty we can get from time to time, And eternally press forward for what is yet to get.

 

But this wisdom runs counter to the mentality of a lot of people today. They often push an “all or nothing” strategy that demands the accomplishment of everything all at once.

 

This is actually the worst possible approach.

 

The American Revolutionaries understood this.

 

In response to the hated Townshend Acts, John Dickinson penned the most widely-read documents on American liberty until the publication of Thomas Paine’s Common Sense in January 1776.

 

The “Penman of the Revolution” signed off the first of his twelve Letters from a Farmer in Pennsylvania with an important maxim – “Small things grow great by concord.”

 

Dickinson wrote, and the colonists understood, that each step forward for liberty was essential, because, as Jefferson emphasized years later, “It takes time to persuade men to do even what is for their own good.

 

When working to advance liberty against what is again the largest government in history, most people ignore – or are just completely unaware of – this essential strategic advice from the Founders.

 

For instance, when it comes to supporting sound money, most people jump straight to “End the Fed!” While abolishing the central bank would be phenomenal, we shouldn’t sit back and wait for Congress to turn off its money printer. There isn’t the political will in that body to even just audit the Fed, much less shut it down.

 

That means reforming the monetary system and breaking the Federal Reserve’s monopoly on money will take a bottom-up approach driven by the people and the states.

 

Even if they understand this reality, a lot of people still try to bite off too much at one time at the state level. They want to end all taxes on gold and silver, make it legal tender, establish abullion depository, establish state gold and silver reserves, and even more, all in one piece of legislation.

 

Any attempt to narrow the focus of a bill to something more likely to pass elicits cries of “compromise” or accusations of “watering down” the legislation.

 

The problem is it’s almost impossible to pass sweeping legislation that addresses every aspect of anything, much less something as far-reaching and complex as sound money and monetary policy.

 

Success against the largest government in history requires more than tough rhetoric or big talking in social media posts. It requires a sound strategy – as the founders recognized, a step-by-step approach that can be implemented over time.

 

The Federal Reserve and the U.S. government have monopolized money and locked us into a fiat monetary system for more than 100 years. We won’t establish a sound money system in a day by passing a single bill.

 

Here’s a crucial point to understand: there is no silver bullet.

 

Anyone promising one is either lying to you or more likely hasn’t made an effort to address the issue beyond posting online about how anything less than their idea is a “waste of time.”

 

The real waste of time is trying to do too much at once. After all the time and effort, you usually end up with nothing.

 

However, an incremental, step-by-step approach is proven to be effective. It just takes more time and energy.

 

This is exactly how Utah has evolved into a growing haven for sound money.

 

Utah laid the groundwork in 2011 with the passage of the Utah Legal Tender Act. The law made gold and silver coins issued by the federal government legal tender in the state.

 

It also specified that “the exchange of gold and silver coins for another form of legal tender does not create any individual income or sales tax liability.” In effect, it repealed both the state sales and capital gains taxes on gold and silver.

 

This opened the door for people in Utah to begin using gold and silver as money by expressly declaring it as such. It also removed some tax barriers to doing so.

 

The Utah legislature followed up the next year with a second bill expanding the Legal Tender Act, and renaming the law the “Specie Legal Tender Act.”

 

Most significantly, as the title suggests, the 2012 measure expanded the definition of specie legal tender beyond only coins authorized by the feds to include any gold and silver coins approved by the state.

 

By allowing additional specie to be used as legal tender, the Utah legislature freed its residents from potential supply constraints imposed by the use of only United States-minted gold and silver coins. More importantly, the people of the state of Utah now define just what specie is considered constitutional tender, further distancing themselves from potential control over their money by Washington D.C.

 

The 2012 expansion of the act also clarified some of the tax issues.

 

The impact of the Specie Legal Tender Act has been profound. It opened the door for the development of a robust gold and silver market in the state. Entrepreneurs stepped up and took advantage of the friendlier environment.

 

With some legal hurdles cleared away by the state’s legal tender law, the United Precious Metal Association (UPMA) in partnership with Alpine Gold Exchange set up the state’s first “gold bank.”

 

The UPMA is a non-profit member cooperative that offers bank-like services to its members using legal tender precious metals. UPMA is similar to a credit union offering services from other providers to its membership much like the ‘AARP’ or other such associations.

 

Alpine Gold Exchange serves the UPMA as its metals exchange and exclusive service and support provider offering publicly available accounts denominated in gold and silver dollars. According to the company’s website, Alpine’s assets under management have increased by over 2,000-fold, and the UPMA has seen its membership surge to over 50,000 accounts.

 

You don’t even have to live in Utah to open an account, and an account holder can conduct business in gold and silver with any other account holder across the country.

 

Customers with gold or silver accounts at Alpine can spend it in everyday transactions using a debit card connected to their accounts. In effect, Alpine facilitates the electronic transfer of gold and silver, allowing customers to make purchases using fractions of coins. This solves one of the central problems of transacting business using precious metals.

 

The Utah Specie Legal Tender Act has also led to the creation of the Goldback, a local, voluntary medium of exchange. Goldbacks are “gold-weight” notes made from physical gold. The 1 is 1/1000 of an ounce of Troy weight gold; the 5 is 5/1000 or 1/200 of a Troy ounce, and so on. The company created a process that turns pure gold into a spendable physical form for small transactions.

 

It describes the goldback as “the world’s first physical, interchangeable, gold money, that is designed to accommodate even small transactions.”

 

UPMA General Counsel Larry Hilton noted that the Utah Goldback is legal tender in the State of Utah because of  the Specie Legal Tender Act

 

“This means that under Utah State law, the Goldback is a voluntary legal tender in Utah. The goal is for the Goldback to circulate within the State.”

 

The Goldback has been enthusiastically embraced in Utah. The UPMA estimates that Goldback acceptance may be as high as 50 percent among small business owners. Because of this strong demand –  both inside Utah and from other states, the company has been able to launch Goldback editions in NevadaNew HampshireWyoming and South Dakota. With more likely soon.

 

In 2022, Utah opened the door for the use of Goldbacks to grow even further by expressly repealing the sales tax on the sale of all “goldback” notes.

 

Specifically, the law exempts “sales of a note, leaf, foil, or film, if the item: (a) is used as currency; (b) does not constitute legal tender of a state, the United States, or a foreign nation; and (c) has a gold, silver, or platinum metallic content of 50% or more, exclusive of any transparent polymer holder, coating, or encasement.”

 

The passage of the Utah Legal Tender Act also set a precedent for other states to follow.  Wyoming, Oklahoma, and Arkansas have since made gold and silver legal tender.

 

In 2024, Utah took another step in supporting sound money by authorizing the state to hold gold and silver reserves. Under the new law, the state treasurer is authorized to invest up to 10 percent of certain funds in silver, gold, platinum, copper, or palladium.

 

Holding gold and silver will allow the state of Utah to shield its assets and hedge against rapidly depreciating Federal Reserve notes.

 

Holding gold and silver in reserve could also create a pathway for Utah to maintain financial independence should the U.S. dollar collapse, a very real possibility as the world moves away from the greenback as its reserve currency.

 

In a press release following the bill’s passage, sponsor Rep. Ken Ivory commented that HB348 “will position Utah to weather the economic turbulence and inflation resulting from decades of federal fiscal recklessness. Gold and silver have been the best rainy-day investments since Noah. Utahns know a nation cannot print prosperity. Sound money is the key to a sound economy and real, sound wealth.”

 

Finally, in 2024, Utah specifically excluded central bank digital currency (CBDC) from the state’s definition of legal tender and money.

 

The new law specifies that “a central bank digital currency is not specie legal tender and is not legal tender in the state.”

 

How such legislation would play out in practice against a CBDC, should the federal government attempt to implement one, is unknown, but the hope is specifically excluding CBDC from the definition of legal tender could create roadblocks to its use of money in the state.

 

This progression in support of sound money in Utah demonstrates the effectiveness of Thomas Jefferson’s “inch by inch” strategy in action.

 

The first version of the Utah Specie Legal Tender Act was relatively limited in scope, but subsequent steps broadened it and the results are undeniable. Utah has become the sound money leader in the United States.

 

Of course, there is still a lot more work to do, more steps to take, and more inches to be gained. Most of which is really up to the people themselves – choosing to use real money more and more often in everyday transactions.

 

Samuel Adams summed it up best:

 

“Instead of sitting down satisfied with the efforts we have already made, which is the wish of our enemies, the necessity of the times, more than ever, calls for our utmost circumspection, deliberation, fortitude and perseverance.”

 

Mike Maharrey
Michael Maharrey [send him email] is the Communications Director for the Tenth Amendment Center. He is from the original home of the Principles of ’98 – Kentucky and currently resides in northern Florida. See his blog archive here and his article archive here.He is the author of the book, Our Last Hope: Rediscovering the Lost Path to Liberty., and Constitution Owner’s Manual. You can visit his personal website at MichaelMaharrey.com and like him on Facebook HERE

 

From tenthamendmentcenter.com

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