By Michelle Smith - Exclusive to Silver Investing NewsIt's not only individuals that are seeking safe havens. Increasingly, legislators are showing interest in providing their constituents with safe alternatives to paper money. Over a dozen US states have expressed interest in considering or issuing an alternative currency, and one has already taken a step in that direction with gold and silver coins. On March 25, 2011, Utah's Governor Gary Herbert signed House Bill 317, approving gold and silver coins issued by the federal government as legal tender. Recognizing gold and silver as legal tender eliminated certain state tax liabilities such as tax on profits on coins when were viewed mostly as assets. Last month, legislators in the state of Wyoming voted down House Bill 85, referred to as the Doomsday Bill. The legislation called for a study into the measures the state government would need to take in order to continue operating in the event of a disruption of federal operations. One issue considered under the bill is the “potential effects of the rapid decline of the United States dollar and the ability to quickly provide an alternative currency.” Though the Doomsday Bill was voted down, it is an indication that the threat of failing currency is a concern within society. The consideration of alternative currencies by state governments is a subject not without debate.
Eric Freedman, professor at Hofstra University's law school believes an “economic catastrophe” could result from having competing currencies in the US which “would be the destruction of the country,” Freedman said. It is believed that US states would face major constitutional challenges if they attempted to develop alternative currencies. Furthermore, offering a currency alternative is perhaps a task that is not best undertaken by lower governments, according to Hugo Salinas Price, President of Mexican Civic Association Pro Silver.