Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, 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. Just three years ago, only three states had similar proposals in place.
http://money.cnn.com/2012/02/03/pf/states_currencies/index.htm
Further excerpts from:
http://etfdailynews.com/2012/02/04/u-s-states-prepare-for-hyperinflation-gld-slv-uup-udn-sgol-iau/
In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State’s governmental finances and private economy will be thrown into chaos,” stated North Carolina Representative Glen Bradley in a bill he drafted in 2011.
According to the U.S. Constitution, Article 10, Clause 1 (Contract Clause), States can issue their own money as long as they are in the form of gold and silver coins.
Article 10, Clause 1 (Contract Clause)
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
According to Prudent Bear’s Nolan, the time bomb ticks away on the dollar, and when it blows, the demise of the dollar could move rather quickly as we saw in both the sub-prime mortgage market in the U.S. and in Greek sovereign debt in 2010.
“All of a sudden you could see a situation where the sovereign debt problem in Europe leads to question on the solvency of European banking system, on global derivatives, counter-parties, and maybe at the point there will be concerns with other structural debt issues be it Japan or the U.S.,” said Nolan. “Once the global community loses confidence in the capacity of policymakers to sustain credit excesses then it’s a totally different ballgame than what we see in Europe.”
