A recent article in the Washington Post discussed the state of Virginia's contemplation of developing its own currency.
According to the article:
"Virginia Del. Robert G. Marshall fears that a financial apocalypse is coming and only one thing can save the Commonwealth: its own currency.
The idea that Virginia should consider issuing its own money was dismissed as just another quixotic quest by one of the most conservative members of the state legislature when Marshall introduced it three years ago. But it has since gained traction not only in Virginia, but also in states across the country as Americans have grown increasingly suspicious of the institutions entrusted with safeguarding the economy."
The article goes on to say, "His proposal would create a 10-member commission to study "the need, means, and schedule for establishing a metallic-based monetary unit to serve as a contingency currency for the Commonwealth.""
While I'm sure the federal government wouldn't be a fan of such an idea since such a plan doesn't back the supposed confidence instilled by the US dollar, I think it's a great idea to have a back up plan…just in case.
I Don't Need State Coins to Think Alternatively
There are all sorts of ways to think alternatively when it comes to currencies. While not all such ideas are viable payment options when heading out to the local grocery store, they don't necessarily have to be. In a situation in which the American dollar is quickly becoming devalued, I'd rather have things like hard metals (nickel, copper, silver, gold, etc.), food and alcohol, fuel and supplies (propane, gas, batteries), and yes, even guns and bullets to barter with in place of currency. Such items could be much more valuable to have in hand for personal use or exchange than any sort of paper currency.
Options and Opportunities
I am a fan of physical gold, silver and other metals as investments. I really don't care too much about their form. Whether they're as coins, bars, jewelry, candlesticks or whatever, as long as their metal content and amount is relatively easily identifiable I'm willing to accept it as a possible investment option. Therefore, if states want to begin creating their own coins containing precious metals (similar to pre-1964 dimes and quarters), I'd be willing to accept them as an investment opportunity as long as there wasn't a significant markup to buy such items.
Taking Advantage of Inflation if Necessary
Alternative currencies can be a great hedge against inflation. According to the Washington Post article, "Marshall believes that the result could resemble the Weimar Republic of Germany after World War I: a worthless currency, skyrocketing inflation and a crumbling government."
It goes on to say,
""This is a lifeboat study; what happens if?" Marshall said.
Mainstream economics maintains that America is in little danger of turning into postwar Germany. Inflation is below 2 percent even though the Fed has tripled the amount of money in circulation since the 2008 financial crisis. Investors view the dollar as a safe haven, buying up greenbacks when turmoil strikes around the globe. A single currency is one of the bedrock assumptions of modern economics.
But that doesn't mean Virginia shouldn't be ready, Marshall and his supporters believe. His proposal would create a 10-member commission to study "the need, means, and schedule for establishing a metallic-based monetary unit to serve as a contingency currency for the Commonwealth." The study would cost $17,440."
Now I don't really believe that inflation could go the way of the Weimar Republic…at least not anytime soon, but I do agree that it's best to be prepared to act if things start to get a little out of hand when it comes to inflation. I'd rather be ready to take advantage of inflation should it occur through things like inflation-based investments like government series-I savings bonds, precious metals, and yes, alternative currencies should inflation start to rise. This way I'm reaping the rewards of inflation rather than succumbing to its possibly crippling effects.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
- Politics & Government
- state of Virginia