Supporters Foresee Potential Collapse of Federal Reserve
BY COREY HUTCHINS
South Carolina might have a long history of attempting to distance itself from the federal government — think nullification, secession and the Civil War — but this week featured a new battle line: money.
One Upstate Republican state senator has introduced legislation to look into whether the Palmetto State should mint its own currency.
It’s just one part of a growing movement.
According to Spartanburg County Sen. Lee Bright’s legislation, a committee should study “whether this state 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.”
While the senator tells Free Times he doesn’t think anyone needs to run out and start minting coins just yet, he does think it’s something lawmakers should look into.
“My feelings were that we needed to do a study,” he says.
At the time Bright was crafting his legislation he was unaware of a movement starting to build around “sound money policy” in South Carolina as a way to protect the state against hyperinflation or a collapse of the Federal Reserve.
After he introduced his joint resolution calling for the state to perhaps coin its own currency, though, Bright got an invitation to a meeting.
On Feb. 7, about 70 people from all over the state and as far away as Missouri packed a room on Senate Street in Columbia as part of an economic summit on the subject of using gold and silver as a backup state currency.
At least nine state representatives, including GOP House Majority Leader Kenny Bingham of Lexington, and seven senators attended the event, according to a list provided by organizers. Republican State Treasurer Curtis Loftis was also present. State Sen. Nikki Setzler of Lexington appeared to be the only elected Democrat there.
Steve Isom, a Cayce city councilman and chairman of the South Carolina Sound Money Committee, set up the event.
“Basically what I saw happen was people starting to take this seriously,” Isom says about the turnout.
Speakers included Larry Parks, director of the Foundation of the Advancement for Monetary Education, and constitutional lawyer Edwin Vieira, who is widely regarded in end-the-Fed circles. Both spoke by videoconference.
“Originally it just started out to be a state event and it grew a lot of national attention through different grassroots groups,” Isom says. “One of my objectives was to make this a serious issue.”
University of South Carolina economics professor William Hauk, who researches political economics, among other fields, says there’s little that could be done at the state level when it comes to alternative currencies.
“I think there is little evidence that the Federal Reserve is about to break down, so I don’t honestly see what the point of that would be,” Hauk says. “More generally, if the state of South Carolina were to introduce its own currency as a sort of alternate to that issued by the federal government, it could make it much more difficult to trade and interact with the rest of the country, which would be pretty much disastrous for the South Carolina economy.”
Since Bright introduced his legislation it has made national news.
Isom, however, says it’s not a radical concept. He says it’s not about replacing the dollar, and hopes the recent legislation doesn’t eclipse the broader themes of the movement. He adds that Bright’s legislation and the sound money summit are a prelude to the introduction of several bills dealing with the issue.
On Feb 8, a day after the summit, a group testified about the issue before a House banking panel.
Last year, Laurens GOP Sen. Mike Pitts drew similar headlines with a bill that would replace federal currency in the state with gold and silver.
Patricia Wheat, a South Carolina Sound Money Committee member, says critics should have held their breath about the plan.
“Had they invested that money in May in gold, by October first this state would have had zero deficit,” she says. “No budget deficit. It’s an enormous opportunity here.”
