Legislator says the state needs its own currency

Staff WriterMarch 17, 2011 

— Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.

The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit - potentially allowing residents to trade gold for groceries.

"I think we're in the process of inflating a dollar bubble that could be very devastating," said Bradley, a freshman legislator elected in November's GOP tide. "The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury."

Bradley's bill has yet to attract any co-sponsors among his fellow Republicans.

Mike Walden, an economics professor at N.C. State University, said the notion of North Carolina reverting to having its own currency is outlandish.

"We dealt with this issue about 100 years ago when the Federal Reserve was established," Walden said. "If North Carolina were to have its own currency, that would put us at an extreme competitive disadvantage vis-a-vis other parts of the country and other parts of the world."

State Treasurer Janet Cowell joked that Bradley's precious metals proposal could increase efficiency in state government by providing a good use for her department's old basement vault, which is currently used for storage.

"I look forward to engaging in an important public policy debate about whose face should be on the gold coin," quipped Cowell, a Democrat.

But Bradley predicts that world events could soon prove him prescient.

"I don't necessarily believe [the Federal Reserve] is about to collapse right now," said Bradley, 37. "There are still a few things they can do with qualitative easing to sort of extend their survival. It's just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today."

The Austrian School

Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition, he said. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I.

Back then the value of most of the world's currencies were tied to the amount of the gold amassed in their national treasuries. The United States abandoned the gold standard in 1933, after it was blamed for worsening the Great Depression.

Though the ideas of the Austrian School have been rejected by mainstream economists for much of the last century, they are in vogue with Libertarians and some supporters of the tea party movement.

The language of Bradley's House Bill 301 predicts a dire future for the U.S. economy.

"Many widely recognized experts predict the inevitable destruction of the Federal Reserve System's currency through hyperinflation in the foreseeable future," the bill declares. "In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the State is not prepared, the State's governmental finances and private economy will be thrown into chaos. ..."

Asked who are the "widely recognized experts" to which his bill refers, Bradley cited U.S. Rep. Ron Paul of Texas and Peter Schiff, a precious-metals dealer and investor who regularly appears as a commentator on Fox News.

Walden, the economics professor, said the views espoused by adherents of the Austrian School are well outside the mainstream of modern economic thought.

Bradley's ideas for taking the state back to the Gilded Age don't end at economics.

About Commerce Clause

A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines, measures that fly in the face of more than a century of U.S. Supreme Court rulings interpreting the Commerce Clause of the U.S. Constitution.

"They're wrong," Bradley said confidently of generations of justices. "The 10th Amendment is quite clear that those powers not reserved in the Constitution for the federal government are reserved to the states. It's doesn't take a high-priced lawyer to interpret the Constitution."

Rep. Becky Carney, a Charlotte Democrat, said she found Bradley's currency bill "perplexing."

"There has absolutely been no indication of the collapse of the Federal Reserve system," said Carney, who serves on the House banking committee. "It sounds like the Chicken Little story about 'the sky is falling.'"

The office of House Speaker Thom Tillis declined to say whether the GOP leadership supports Bradley's proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die.

"There are a lot of diverse opinions and diverse views in our caucus," said Jordan Shaw, Tillis' spokesman. "I don't think we're going to forecast what will happen."

michael.biesecker@newsobserver.com or 919-829-4698

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