The state of Virginia is known for many things. Ham, wild ponies, the Blue Ridge Mountains and Jefferson himself all have a place in its storied history. If Virginia Del. Robert G. Marshall has his way though, a new asset may tack itself onto that list: the Commonwealth's own currency.
When Marshall first introduced the notion that Virginia should mint its own "lifeboat" currency a few years ago, many simply considered it a misfire from a hyperconservative member of the state legislature. Yet since the financial crisis, many critics in the state worry the Fed has pumped too much money into circulation. (Apparently) they feel the need to take matters into their own hands to avoid Virginia becoming a small, postwar Germany. It should be noted that the Fed has tripled the amount of money in circulation since 2008 in an effort to buoy the economy, but inflation remains below 2 percent.
This author's own thoughts are in line with those expressed by Democratic Caucus chairman Mark Sickles of Fairfax at the proposal: “Are we seriously going to spend taxpayer resources studying a replacement to the world’s backbone currency? Are we descending into la la land?”
And yet, however scary, Virginia is not alone. Four other states have bills pending this year, as distrust with American institutions that safeguard the economy grows. As of now, Utah is the only state that has approved a law recognizing nontraditional currency. States do not have the constitutional authority to print money, but Marshall has found a potential loophole in Virginia that could enable the minting of silver or gold coins.
While a gold Virginian coin of Thomas Jefferson riding a wild pony (eating ham?) in front of the Blue Ridge Mountains would have its place as a certain collector's item, this proposal's only merit is that it illuminates just how completely trust in the Fed has eroded. Introducing various state currencies for lack of faith in the well-established greenback sends a potentially dangerous message to countries and investors around the world who have come to rely on the U.S. dollar.