To quote directly from Jason Hamlin on the website marketoracle.co.uk:

In what could be the financial shot heard around the world, the state of Virginia is considering the establishment of a joint subcommittee to study whether the Commonwealth should adopt a currency such as gold or silver 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.

This blogger found the proposed Virginia legislation using the Virginia.gov website. In order to understand where the States derive their authority to adopt precious metals for purposes of intrastate governmental fees it may be best to quote language from the proposed legislation directly from the Virginia.gov website:

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 the States may adopt whatever currency they desire for the purposes of performing their sovereign governmental functions, even to the extent of adopting gold and silver coin for those purposes while refusing to employ a currency not redeemable in gold or silver coin that Congress has designated “legal tender”;

Those who understand the United States Constitution will no doubt be aware of the fact that the power to regulate intrastate affairs matters is not derived from the Federal government (nor the Supreme Court), but from the inherent sovereignty of the States themselves. The Supreme Court’s opinion on the matter is used to provide laypeople with insight regarding the Supreme Court’s position on this issue. As of yet, this legislation is still pending. However, those interested in this matter are well advised to check out the links above to find out more about the actual provisions of this legislation and the ramifications thereof.

It would appear that Virginia is not the only American State to ponder the adoption of precious metals as an alternative payment method for intrastate matters. Recently it came to this blogger’s attention that the state of Utah has seen similar proposed legislation. To quote directly from an article by Alex Newman on the website thenewamerican.com:

Under the proposed legislation, introduced late last year for the upcoming legislative session, the state government would be authorized to collect and return taxes and fees in precious metals. Additionally, Utah’s government could use gold and silver in connection with any intrastate transaction. But of course, it would be entirely up to citizens whether they preferred to use precious-metals coins or U.S. dollars…

In 2009, Federal legislation (H.R. 4248: Free Competition in Currency Act of 2009) was introduced by Representative Ron Paul which would have provided more currency options to those in the jurisdiction of the United States of America. However, this legislation failed to be enacted. To quote directly from govtrack.us:

This bill never became law. This bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven’t passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session.

As the United States of America is composed of 50 sovereign States as well as the Federal government the Federal legislature would be required to pass legislation regarding currency usage for matters falling under the Federal bailiwick, but State matters are dealt with exclusively by State legislatures. Clearly, the ultimate outcome for State legislation such as that noted above has yet to be determined. However, it would appear that there is more support for adopting precious metals for payment of government fees at the State level compared to the Federal level. That said, the future of both issues is uncertain.

Should legislation similar to that noted above be adopted by one or more of the United States, then this could have tremendous implications for the political-economies that compose the Association of Southeast Asian Nations (ASEAN) or are geographically located within Greater Asia. Companies from Asia doing business in the USA may need to make some currency adjustments should business interests compel presence in a State which has adopted specie or precious metals as a method of paying State government costs and fees.

For related information please see: Stock Exchange Mergers

In any event, the dollar can only go south. The greenback slid to its lowest level in almost five months versus the euro. Gold, which represents a hedge against inflationary expectation, has also climbed to a record high on market anticipation that the Fed will flood the financial system with further liquidity to prop up the US economy.

This monetary easing will result in further weakening of the dollar. And as the US government continues to run a massive deficit, the Fed will be obliged to come to the rescue by purchasing the Treasuries that finance the deficit, which is not likely to come down in the foreseeable future due to economic weakness, falling tax revenue and spending obligations that have dramatically increased.

With the US weakness, a sovereign debt crisis in Europe and deflation in Japan, how will Thailand cope with the policy challenge? The first thing that comes to mind is that the baht will continue its upward trend. This is inevitable. The baht could go back to the pre-1997 crisis level of Bt25 to the dollar…

For those unaware, the United States Federal Reserve Bank recently announced that $600 billion in liquidity would be injected into the United States economy over the course of the coming months. As can be gathered from the above quotation, this “quantitative easing” policy is resulting in a depreciation of the dollar compared to Asian currencies (and other global currencies, but the focus of this post will remain on Asia, specifically Thailand). In an article written in The Nation Newspaper and distributed by ThaiVisa.com this issue was discussed in further detail:

When massive capital outflows from the US head towards Asia, much of it is unable to enter China so it floods other emerging markets, especially Asean countries, Korn [Chatikavanij, Finance Minister of the Kingdom of Thailand] said.

“We would like the two economic giants to settle their differences on the exchange-rate issue. I think they understand our predicament,” said Korn…
On the one hand, the US dollar has continued to depreciate, while on the other, China has not allowed the yuan to appreciate. Given the latest US announcement of quantitative easing aimed at stimulating the domestic US economy, several Asian currencies have significantly appreciated against the US dollar, raising concerns about the region’s export competitiveness…

The twin economic giants of China and America have yet to fully reach equilibrium in matters related to currency and trade, but an immediate issue for many Thai Nationals is the relative appreciation of the Thai Baht. There are many who feel that a strong Baht is not in their interests and depending upon circumstances they may be correct.  However, the recent currency fluctuations could prove to be a benefit to those Thai nationals interested in seeking American Immigrant Investor visa benefits.

The United States EB-5 visa (Immigrant Investor category) was designed to provide a travel document and lawful permanent residence to otherwise qualified foreign nationals who wish to make a substantial investment in legally eligible investment programs the United States of America. As the Thai baht has appreciated against the United States dollar it has become relatively “cheaper’ (in Baht terms) to meet some of the investment criteria in the United States. Therefore, as the dollar becomes weaker versus the Thai Baht it becomes less expensive, from a Baht standpoint, to invest in the USA. For those wishing to immigrate to the USA, the current Baht/Dollar exchange rate is something of a windfall.

This could be a boon to the United States economy as well since investment in the United States leads to the creation of new jobs. Furthermore, lawful immigration is one of the central components that drives the American economy. As more Thai nationals invest in the United States economy, the stronger that economy becomes thereby naturally fueling a recover in the overall American economy. As the American economy continues to recover, there may be ancillary benefits that accrue to individuals and businesses in the USA and around the globe. Hopefully this scenario will play out over the coming months and help to spur a recovery in the United States economy.

For related information please see: EB-5 Visa Thailand or US Visa Thailand.