As you may have heard, the Commonwealth of Virginia is looking to create its own currency. And for some reason many find this shocking.
But why?
Efforts like this one from Virginia Republican Del. Robert Marshall shouldn’t come as a total surprise since states are merely looking for alternatives to keep their economies strong. And why shouldn’t they given the sluggish economy and the Federal Reserve’s announcement that it will continue its stimulus program, which could cause inflationary issues down the road and could cheapen the dollar.
Just last year Utah passed a law that recognizes gold and silver coins as currency.
Not long after the financial crisis hit, some U.S. cities made their own currency to help pay for everything from fuel to yoga.
And even Disneyland has its own money!
The issues shouldn’t be Virginia making its own currency — the real issue at hand is who would appear on the currency? Unfortunately Dave Matthews has been ruled out.
But, seriously, this currency move by Old Dominion isn’t such a crazy idea when you consider that the strength of the dollar is a real issue for states to fear. Consider the countries who have already dropped the USD. China has forgone using the dollar for its oil dealings, and, instead, is using its Yuan. Iran and Russia dropped the USD in a bilateral trade agreement last year. And for years there have been murmurs that OPEC may drop the dollar in lieu of another currency.
And while states can’t mint their own currency — the Constitution forbids that — they can make gold and silver coin a tender to pay off debts. Smaller-scale communities are permitted to create their own money as long as that money is recognizably different than the USD. CNN reports, “… lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option.”
Could 2013 be the year of fiat money backlash?
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