ARKANSAS & OKLAHOMA, CENTRAL BANK DIGITAL CURRENCIES, AND BULLION
These two articles come courtesy of W.G., with our thanks for passing them along to us. With these two states, Arkansas and Oklahoma joining the movement of states to recognize bullion as legal tender, and to restrict the movement to central bank digital currencies:
Let's look at the first article. The Oklahoma Bill would effectively prohibit the state or any business from accepting payment only in a central bank digital currency:
Last week, the Oklahoma House passed a bill that would ban some brick-and-mortar businesses and government agencies in the state from requiring payment in central bank digital currency (CBDC).
Rep. Clay Staires (R) introduced House Bill 1633 (HB1633) on Feb. 6. Under the proposed law, businesses providing “basic needs, selling or offering for sale goods or services during regular business hours” would be prohibited from requiring payment by a central bank digital currency. It would also bar them from prohibiting the use of cash.
“Businesses providing basic needs” is defined as businesses selling “basic life essential goods or services” including grocery stores, utility companies, internet companies, pharmacies, and insurance companies.
State and local government agencies in Oklahoma would be bound by the same rules.
On March 23, the House passed HB1633 by a 79-11 vote.
In effect, the enactment of HB1633 would shield Oklahomans from being required to use a central bank digital currency when dealing with state and local agencies, or making purchases of “basic needs.”
While HB1633 requires businesses providing basic needs and government agencies to accept cash as legal tender, it does not mention gold or silver, but under state law, gold and silver are considered legal tender in the state of Oklahoma. That means businesses would also be able to accept gold and silver, although there needs to be a mechanism to differentiate between the face value and market value of gold and silver coins.
This is good news because in effect it means that more and more people at the local and state levels are waking up to the fact that a digital and cashless society are the final steps in an architecture of slavery to the same oligarchs that have made such a mess of the modern western world. It's an indicator that we're watching the emergence of a parallel economy and financial system that are bypassing the metastasizing tumors of central banks. What digital currencies are not are currencies at all; they are merely corporate coupons which in the hands of a central bank or government can be turned on or off at will, depending upon one's behavior:
Imagine if there was no cash. It would be impossible to hide even the smallest transaction from the government’s eyes. Something as simple as your morning trip to Starbucks wouldn’t be a secret from government officials. As Bloomberg put it in an article published when China launched a digital yuan pilot program in 2020, digital currency “offers China’s authorities a degree of control never possible with physical money.”
The government could even “turn off” an individual’s ability to make purchases. Bloomberg described just how much control a digital currency could give Chinese officials.
The PBOC has also indicated that it could put limits on the sizes of some transactions, or even require an appointment to make large ones. Some observers wonder whether payments could be linked to the emerging social-credit system, wherein citizens with exemplary behavior are ‘whitelisted’ for privileges, while those with criminal and other infractions find themselves left out. ‘China’s goal is not to make payments more convenient but to replace cash, so it can keep closer tabs on people than it already does,’ argues Aaron Brown, a crypto investor who writes for Bloomberg Opinion.”
Economist Thorsten Polleit outlined the potential for Big Brother-like government control with the advent of a digital euro in an article published by the Mises Wire. As he put it, “the path to becoming a surveillance state regime will accelerate considerably” if and when a digital currency is issued.
But as this article suggests, the major obstacle toward the use of bullion or specie in transactions is the difference between market value, and face value, of such media. This brings us to the bill before the Arkansas state House of representatives:
A bill introduced in the Arkansas House would make gold and silver legal tender in the state and would effectively repeal the state capital gains tax on gold and silver. Passage into law would eliminate barriers to using gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.
Rep. Robin Lundstrum (R) and Sen. Jonathan Dismang (R) introduced House Bill 1718 (HB1718) on March 27. The legislation would make “gold and silver specie” legal tender in the state, meaning it would be recognized as a medium of exchange within the state. Practically speaking, this would allow Arkansans to use gold or silver coins as money rather than just as mere investment vehicles. In effect, it would put gold and silver on the same practical footing as Federal Reserve notes.
“Specie” is defined as a “coin having gold or silver content; or refined gold or silver bullion that is coined, stamped, or imprinted with its weight and purity and valued primarily based on its metal content and not its form.” Under the proposed law, specie would include coins issued by the U.S. government or “other specie that an Arkansas court rules to be within state authority to make or designate as legal tender.”
By allowing the court to designate additional specie to be used as legal tender, Arkansas could free its citizens from potential supply constraints imposed by the use of only United States-minted gold and silver coin. More importantly, the people of the state of Arkansas would be able to define what specie is considered constitutional tender, further distancing themselves from potential control of their competing currency by Washington D.C. (Emphasis added)
Notably the Arkansas bill is defining specie not simply in terms of a stated value, but rather in terms of a stamp indicating its weight and purity, that is to say, its market not its face value. This is a bold - and essential - step toward being able to use such stamped specie as money.
It takes but a little thought to see why. Imagine, for a moment, that you have in your possession a Morgan silver dollar from the nineteenth century. The silver dollar is effectively an ounce of silver, and it is stamped with a value that says "one dollar." You could, of course, take that dollar and spend it to buy a soda from a local convenience store, in which case the clerk will assess its value as the stamped value of one dollar. You would, of course, be foolish to spend it this way, because the real value of the silver dollar, just on silver content alone, would be several times one dollar, say, around twenty dollars, even though its stamped value would be only one dollar. Add to this numismatic and collectors' features, and the Morgan dollar is usually worth more than even its silver content, depending on the proof condition of the coin. By making the weight and purity stamp the value of an ingot or coin, rather than a declared and completely artificial value of a mint, the medium becomes usable as a medium of exchange, because you're no longer withholding it because of its market value vs. its face value. The other thing this does is it stabilizes the prices of such specie rather dramatically.
In considering this measure, it becomes clear that Arkansas means business. The next step? Bullion depositories and the use of certificates of deposit as money, with their full convertibility...
See you on the flip side...
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