House Joint Resolution No. 557 — Virginia prepares for Failure of the Federal Reserve

Virginia created a subcommittee to study monetary alternatives in case of a Fed break down which we all know is coming and they considered gold as a viable option.

Here’s what zero hedge had to say about it:

In what may one day be heralded as the formal proposal that proverbially started it all, the Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to “to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System.” In other words, Virginia will study the fallback plan of a “timely adoption of an alternative sound currency that the Commonwealth’s government and citizens may employ without delay in the event of the destruction of the Federal Reserve System’s currency” and avoid or “at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System.” Most importantly as pertain to the currency in question, “Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated ‘legal tender’.” Whether this resolution will ever get off the ground, and actually find that the world is at great risk should gold not be instituted as a backstop currency, is irrelevant. The mere fact that it is out there, should provide sufficient impetus to other states to consider the ultimate Plan B.

Here’s the PDF: House Joint Resolution No. 557

The full text of the Resolution with Highlighted areas in Bold:

HOUSE JOINT RESOLUTION NO. 557
Offered January 12, 2011 Prefiled January 5, 2011 Establishing a joint subcommittee to study whether the Commonwealth should adopt a currency to serve
as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System. Report.
–––––––––– Patron––Marshall, R.G. –––––––––– Referred to Committee on Rules ––––––––––
WHEREAS, the Supreme Court of the United States has ruled in In re Rahrer, 140 U.S. 545, 554 (1891), that “the police power” of a State “is a power originally and always belonging to the States, not surrendered by them to the general government, nor directly restrained by the Constitution of the United States, and essentially exclusive”; and
WHEREAS, the Supreme Court of the United States has ruled in Beer Company v. Massachusetts, 97 U.S. 25, 33 (1877), that the police power of the States “extend[s] to the protection of the lives, health, and property of the[ir] citizens, and to the preservation of good order”; and
WHEREAS, the protection of the lives, health, and property of Virginia’s citizens, and the preservation of good order in the Commonwealth, depend upon the maintenance of both an adequate system of governmental finance and a sound and robust private economy; and
WHEREAS, an adequate system of governmental finance and a sound and robust private economy cannot be maintained in the absence of a sound currency; and
WHEREAS, the present monetary and banking systems of the United States, centered around the Federal Reserve System, have come under ever-increasing strain during the last several years, and will be exposed to ever-increasing and predictably debilitating strain in the years to come; and
WHEREAS, many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future; and
WHEREAS, in the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the Commonwealth is not prepared, the Commonwealth’s governmental finances and Virginia’s private economy will be thrown into chaos, with gravely detrimental effects upon the lives, health, and property of Virginia’s citizens, and with consequences fatal to the preservation of good order throughout the Commonwealth; and
WHEREAS, Virginia can avoid or at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System only through the timely adoption of an alternative sound currency that the Commonwealth’s government and citizens may employ without delay in the event of the destruction of the Federal Reserve System’s currency; and
WHEREAS, “legal tender” denotes a currency that must be accepted in payment of a debt denominated in United States “dollars” if the parties have not stipulated that some alternative currency is to be used as their medium of payment or are not otherwise required to use such alternative currency; and
WHEREAS, the Federal Reserve System’s currency has been designated “legal tender” under color of Title 31, United States Code, Section 5103; and
WHEREAS, under Title 12, United States Code, § 411 and Title 31, United States Code, § 5118(b) and (c), the Federal Reserve System’s currency is not redeemable in gold or silver coin or the equivalent in bullion; and
WHEREAS, that the Federal Reserve System’s currency is not redeemable in gold or silver coin or the equivalent in bullion is being identified by more and more experts as a, if not the, major reason for the ever-increasing instability of the Federal Reserve System; andb
WHEREAS, all gold and silver coins of the United States are designated “legal tender” under the aegis of Title 31, United States Code, §§ 5103 and 5112(h), and must be so designated perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of the Constitution of the United States; and
WHEREAS, pursuant to Article I, Section 10, Clause 1 of and the Tenth Amendment to the Constitution of the United States, each State must make gold and silver coin a Tender in Payment of Debts; and
WHEREAS, the Supreme Court of the United States in Lane County v. Oregon, 74 U.S. (7 Wallace) 71, 76-78 (1869), and Hagar v. Reclamation District No. 108, 111 U.S. 701, 706 (1884), has ruled that
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59 the States may adopt whatever currency they desire for the purposes of performing their sovereign 60    governmental functions, even to the extent of adopting gold and silver coin for those purposes while 61    refusing to employ a currency not redeemable in gold or silver coin that Congress has designated “legal 62    tender”; and
63    WHEREAS, “the police power” being the primary sovereign governmental function of every State, 64    under Lane County and Hagar every State may adopt its own currency, consisting of gold or silver, or 65    both, whenever necessary and proper to facilitate exercises of that power in aid of the general welfare of 66    the State and its citizens; and
67    WHEREAS, under the aegis of Title 31, United States Code, § 5118(d)(2), and perforce of Article I, 68    Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the 69    Constitution of the United States, Americans may employ whatever currency they choose to stipulate as 70    the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a 71    currency not redeemable in gold or silver that Congress may have designated “legal tender”; and
72    WHEREAS, under the aegis of Title 31, United States Code, § 5118(d)(2), and perforce of Article I, 73    Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the 74 Constitution of the United States, the citizens of Virginia may choose to employ as the medium for 75    payment of their private debts whatever alternative currency, consisting of gold or silver, or both, that 76    the Commonwealth may adopt in the exercise of “the police power”; and
77    WHEREAS, in light of the possible instability of the Federal Reserve System, proposals for states 78    and their citizens to adopt an alternative currency consisting of gold or silver, or both, are receiving 79 increasing attention throughout the United States, as evidenced by bills that have been or are being 80    introduced in the legislatures of the States of Georgia, Indiana, Montana, New Hampshire, and South 81    Carolina; and
82    WHEREAS, various systems of alternative currency employing gold or silver, or both, in the form of 83    coin or its equivalent in bullion have already proved themselves in the free market, and could either be 84 employed by the Commonwealth directly or be used as models for a new system created by the 85    Commonwealth to meet Virginia’s unique needs; and
86    WHEREAS, the adoption of an alternative currency consisting of gold or silver, or both, would not 87    destabilize the present monetary and banking systems, the Commonwealth’s governmental finances, or 88    Virginia’s private economy, because it would not compel or commit the Commonwealth or her citizens 89 to employ such alternative currency to the exclusion of the Federal Reserve System’s currency 90 immediately, but would merely make the alternative currency available, and enable it to be used in 91    competition with and preference to the Federal Reserve System’s currency, to the degree that the need 92    for such use became apparent; and
93    WHEREAS, the United States Congress, the U.S. Department of the Treasury, and the Federal 94    Reserve System have taken and are preparing to take no action to provide the United States with an 95 alternative to the Federal Reserve System’s currency, in the likely event that the latter would be 96    destroyed through hyperinflation; and
97    WHEREAS, because legislators in Virginia know or should know all of these facts; and because the 98    General Assembly has the authority, the ability, and the duty to take timely action to deal with this 99 situation without first seeking the approval of or assistance from Congress or any other state; and
100    because the Constitution of Virginia provides, “That all power is vested in, and consequently derived 101 from, the people, that magistrates are their trustees and servants, and at all times amenable to 102    them”––for these reasons, the citizens of the Commonwealth will properly conclude that the members of 103 the General Assembly will be primarily responsible if the Commonwealth is found to be without an 104    alternative currency when the Federal Reserve System’s currency collapses in hyperinflation, or some 105    other related economic calamity supervenes; now, therefore, be it
106    RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be 107    appointed to study whether the Commonwealth should adopt a currency to serve as an alternative to the 108    currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal 109    Reserve System.
110    The joint subcommittee shall consist of eight legislative members who shall be appointed as follows: 111    five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in 112 accordance with the principles of proportional representation contained in the Rules of the House of 113    Delegates and three members of the Senate to be appointed by the Senate Committee on Rules. The 114    joint subcommittee shall elect a chairman and vice-chairman from among its membership.
115    In conducting its study, the joint subcommittee shall call or hear from such witnesses and take such 116    other evidence as it deems appropriate and shall consider recommendations for legislation, with respect 117    to the need, means, and schedule for establishing such an alternative currency. 118    Administrative staff support shall be provided by the Office of the Clerk of the House of Delegates. 119 Legal, research, policy analysis, and other services as requested by the joint subcommittee shall be 120    provided by the Division of Legislative Services. Technical assistance shall be provided by the Treasurer
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121 of the Commonwealth of Virginia and the Bureau of Financial Institutions of the State Corporation 122    Commission. All other agencies of the Commonwealth shall provide assistance to the joint subcommittee 123    for this study, upon request. 124    The joint subcommittee shall be limited to six meetings for the 2011 interim, and the direct costs of 125 this study shall not exceed $12,000 without approval as set out in this resolution. Approval for 126    unbudgeted nonmember-related expenses shall require the written authorization of the chairman of the 127    joint subcommittee and the respective Clerk. If a companion joint resolution of the other chamber is 128    agreed to, written authorization of both Clerks shall be required.
129    No recommendation of the joint subcommittee shall be adopted if a majority of the House members 130 or a majority of the Senate members appointed to the joint subcommittee (i) vote against the 131    recommendation and (ii) vote for the recommendation to fail notwithstanding the majority vote of the 132    joint subcommittee.
133    The joint subcommittee shall complete its meetings by November 30, 2011, and the chairman shall 134 submit to the Division of Legislative Automated Systems an executive summary of its findings and 135    recommendations no later than the first day of the 2012 Regular Session of the General Assembly. The 136    executive summary shall state that the joint subcommittee intends to submit to the General Assembly 137    and the Governor a report of its findings and recommendations for publication as a House or Senate 138    document and shall specify the date by which the report shall be submitted. The executive summary and 139    the report shall be submitted as provided in the procedures of the Division of Legislative Automated 140 Systems for the processing of legislative documents and reports, and shall be posted on the General 141    Assembly’s website.
142    Implementation of this resolution is subject to subsequent approval and certification by the Joint 143 Rules Committee. The Committee may approve or disapprove expenditures for this study, extend or 144    delay the period for the conduct of the study, or authorize additional meetings during the 2011 interim.

It’s crazy to think that this doesn’t even seem crazy. It seems timely and well thought out. I like the idea that a contingency plan is already in place for when the failure does come. Gold and silver ARE money and should be treated as such. Not as second class commodities that only maniacs buy.



2 Responsesto “House Joint Resolution No. 557 — Virginia prepares for Failure of the Federal Reserve”

1. Galina Huckabone says:

   November 26, 2011 at 4:59 am

   You know when most economists support fiscal stimulus even in the face of rising deficits?

   Reply