Let's make our own gold coins?

Rep, John Dougall from Highland would like to see us all start using gold.  Sure using gold could be cool, but the idea of creating an entirely new monetary system that parallels our own is not only unconstitutional but a waste of time. According to a Salt Lake Tribune report, Dougall is working on an idea for Utah residents to mint their own gold and silver coins.  Gold could then be used in everyday transactions like buying groceries and even paying rent.  But what Mr. Dougall has not thought through is the enormous cost to bring on another monetary system, the cost of maintaining this new system and also the fact minting your own money is unconstitutional.

A few years back I lived in a foreign country.  During my time there the country decided to switch it’s national currency to the dollar (Yes it was stronger then).  I witnessed firsthand the absolute chaos that ensued from seeing local shop owners and grocery store clerks trying to calculate the exchange rate.  The government had to produce thousands of material and hold trainings to help people understand how the dollar worked.  The one thing they had going for them was the exchange rate was frozen so the countries original currency couldn’t go down.  Otherwise the constant fluctuation would have been a nightmare for merchants and consumers.  Since Mr. Dougall would have no ability to freeze the gold exchange without creating a Utah exchange rate, people would have to watch every day and see what their newly minted gold coins are worth.  Merchants would have to install sophisticated cash registers to weight gold coins and then tell you how much they are worth.  The cost to the state of Utah and the local economy would be enormous.

And to my second point…

Article 1 Section 8 of the Constitution states:

The U.S. Congress has the power…"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"

So even if this legislation passed, it is unconstitutional and would be shut down in the court system.

I don’t mind legislators coming up with new ideas to improve our state or look at ways to improve the economy, but this is not it.  Sorry Rep. Dougall, I would run away from this one.  I think Alan Stephens, economic professor at USU, said it best in the article:

“The gold standard limits the growth of the economy, because you’re limited to the supply of gold that is available, which really is not all that much,” he said. Besides, he said, there is no prohibition on transacting in gold if the parties agree to it."

The moral of the story…let us please look for ways to balance our budget, fund education and improve our economy.