States Look Into Printing Their Own Currencies
State legislators in South Carolina, Utah, Virginia and Georgia have begun looking into using state currency to hedge the consequences of hyper-inflation due to irresponsible Fed policy.
As governments across the world begin to call for a removal of the dollar as the worldwide reserve currency in place of a basket of currencies, the relative stability the dollar has enjoyed could soon end.
“If folks lose faith in the dollar, we need to have some kind of backup,” South Carolina State Sen. Lee Bright told the Spartanburg Herald Journal.
While a worldwide shift to a common currency basket would help mitigate currency manipulation, it would threaten the collapse of its value, as nations such as China and Japan that hold trillions of dollars of U.S. debt in the form of dollars would need to sell them away. This would make it far more difficult for the government to sell debt to pay for the massive budget deficits projected for the next decade.
In that event, the only recourse left to the U.S. government would be to print more money, which would quickly lead to it losing its value (the more of something there is, the less it is worth) and would cause commodity prices to skyrocket. Lately, the rise in food and energy costs (priced in dollars), has been because of the Federal Reserve’s ‘Quantitative Easing’ program, which is harming the dollar’s worth.
To head off such disastrous consequences for their citizens, these state legislatures have looked into the prospect of creating state currencies that would be far more stable (as most states are not legally allowed to hold massive debts).
While these bills have little chance of passing, they display the genuine concern many lawmakers have about a federal budget situation that is a complete mess. Without action to reduce our national debt, the consequences are dire and very real.
An end to our disastrous ‘free’ trade policies that have caused massive outsourcing and layoffs (and in turn, far lower tax revenues as well as the need for costly stimulus packages) is critical to preventing these scenarios. Restoring sensible trade policy that made America great is an important piece in the puzzle to solving our budgetary and economic woes.