Okay, I missed that. I was reading the article and the part about this being voluntary was buried pretty far down. Well past the part where it said Texas was designating gold as legal tender and people would be legally allowed to use gold as payments - neither of which is apparently accurate.
So this law says that people can use gold as currency as long as both parties in the transaction agree. Which has always been true. It’s also true that you can use goldfish crackers as currency as long as both parties in the transaction agree.
And the part of the law that says you can refuse to accept goldfish crackers or gold as payments is also still true.
Does it actually? A few other states have passed similar laws, but if you look into the details, it’s up to individual businesses whether to actually accept the new currency. Which makes the laws completely meaningless, instead of just mostly meaningless.
But the kind of people who believe that only gold is real money (the Republican legislator who introduced this law claims that the Bible mandates gold currency) are also the kind of people who believe that the governments in Washington and Austin are controlled by a secret Deep State conspiracy of democrats/socialists/lizards.
Now I can buy tickets for the Houston Livestock Show & Rodeo and eat at Killen’s BBQ, using my stash of gold certificates left over from the Lindbergh kidnapping ransom.
As I’ve remarked in other threads, one could make a case for a silver-only specie standard. Gold is too scare even with modern mining techniques and therefore too deflationary.
And that reminds me that the Texas scheme includes both gold and silver, which raises a question. If I get myself $500 worth of gold and $500 worth of silver, and deposit them in the Texas depository and get my card, and then use my card to buy a $10 item, is that deducted from my gold or from my silver?
I would assume they’d either be equally taken out of both ($5 each), or they have separate gold and silver debit cards. Doesn’t seem a huge problem to solve. But I know what happens when I assume.
If I understand this correctly, and I may not, adjusting for inflation produces precisely the wrong measure. This is an account that takes in gold and (in effect) pays out in current dollars. So the actual dollar cost of gold is what is at stake. Inflation may increase the number of current dollars you can take out. And deflation (were we to have a serious recession) could reduce the dollars you can take out.
Yeah, that is one of the fallacious hooks that the goldbugs throw at the less sophisticated potential customers.
The thing is, I could see someone raise the question, does that constitutional provision from 1787 cover what Texas is proposing, or does it mean that any exchange tender system a state sets up has to be on a strict gold/silver-standard peg? ‘Cause that would be a whole another thing than this.
For that matter, under what constitutional authority, explicit or assumed, does the Federal government have to issue legal tender? Does that fall under “full faith and credit”?
With the much closer to correct claim that current legal tender price of gold very rarely goes down. Which just means that inflation happens, and that there are different standards for the value of gold.
