don't think this has any practical implications,” says David Rapach, associate professor of economics at St. Louis
University. “This could be a combination of nostalgia toward both
states' rights and the gold standard, but we moved away from those types of
models for good reasons.”
Perhaps the good professor has never heard of Gresham's Law, or seen The Hunger Games. But it does fit my model that most
economists' understanding of current economic events has a lag of about ten
years. That is why so many of them missed the build up
to the financial collapse.
I would not underestimate the ingenuity of the public and their preference
for stable value, and their building resentment at being bullied and abused
by pampered elites in a distant city. The Sound Money Bill may be a local
protest, but so was The Boston Tea Party.
Missouri's Sound Money Bill Is Really a Protest
By David Nicklaus
April 24, 2012
When the dreaded hyperinflation arrives, the Missouri House wants Missourians
to be ready.
Last week, the legislative body passed the Missouri
Sound Money Act of 2012, which declares U.S. gold and silver coins to be
legal tender in the state.
That sounds a bit odd, especially since the federal government already
recognizes its bullion coins as legal tender. It's just that nobody's going
to pull out a $50 gold piece to pay for snacks at QuikTrip,
because the ounce of gold in the coin is really worth $1,600.
Backers of the Sound Money Act envision a system in which you could
deposit gold and silver coins in a vault and get a debit card tied to their
metal value. If the Federal Reserve debases the value of the dollar – a
favorite prediction among the gold-bug set – gold and silver would rise
in value, and prescient Missourians could brag about their enhanced
Utah passed a legal-tender law last year, and South Carolina's legislature
is considering one this year.
Rich Danker, economics director of conservative lobbying group American
Principles in Action, said a couple of institutions in Utah are working to
create the gold debit-card system. Until that's in place, sound-money
advocates have to spend out of bank accounts denominated in dollars, just
like the rest of us.
Missouri's legal-tender bill would benefit precious metals investors by eliminating
state capital gains taxes on U.S.-minted coins. A fiscal note says the
state treasury could lose more than $370,000 a year.
That's a small price to pay, backers argue, for monetary freedom....
Read the rest here: Missouri's Sound Money Bill Is
Really a Protest - St. Louis Today