PUBLISHED: 18:38 EST, 9 April 2013 | UPDATED: 07:50 EST, 10 April 2013
States are now rushing to push bills through allowing for gold and silver to be recognized as legal tender as politicians fear that the U.S. economy is going to collapse.
The push from states like Arizona, which passed through their House of Representatives on Monday allowing gold and silver to be considered legal tender, comes as conservatives fear that the Federal Reserve is running the country’s economy into a deep hole.
Lawmakers say the global economy is on the precipice of financial ruin and the U.S. dollar could soon be worth less than the paper used to make it.
New money: More than a dozen states have pushed laws through so that gold and silver can be used as legal tender
These doomsayers are pushing forward legislation that would declare privately minted gold and silver coins legal tender, no different under state law than the U.S. dollar printed by the federal Department of Treasury.
Arizona is one of more than a dozen states to incorporate similar laws into their roster, as many conservatives are harboring a growing distrust in government-backed money.
‘This is the type of currency we have had over the history of mankind,’ Republican state Representative Steve Smith said of the Arizona law.
In 2011, Utah became the first state in the country to legalize gold and silver coins as currency.
Lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have debated similar laws in recent years.
Many investors have invested their money in precious metals in recent years as a hedge against the declining value of the dollar.
Loss of faith: Conservative politicians are concerned about the economic policies put into place by Ben Bernanke during his time as the chairman of the federal reserve
When the value of the dollar declines, gold prices rise.
Gold rose $12, nearly 1 per cent, to $1,604.60 per ounce on Monday with news of Europe’s bailout plan for cash-strapped Cyprus. Silver inched slightly higher, up 2.3 cents to $28.874 per ounce.
The dollar was up against the euro, the currency used by 17 European countries, as well as the Japanese yen and the Canadian dollar in February.
The Arizona bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property.
The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.
Angry Arizonans: The Arizona House of Representatives passed the law through and now it continues through the process before it goes ahead an is enacted in the state
Proponents of the switch to gold and silver argue paper money is too vulnerable to government manipulations.
When central banks boost the amount of currency in circulation to drive down interest rates, the value of that currency relative to others can decline.
Gold-backed money fell out of favor during World War I because the U.S. and many other countries needed to print more cash to pay for the war.
In 1971, President Richard Nixon formally abandoned the gold standard. Now Republicans are pushing for it to come back as they do not trust President Obama and the economic policies put into place by Ben Bernanke during his time as the chairman of the federal reserve.