Should we all worry about the outlook for the mighty American dollar? That is a question that many economists and market traders have pondered as economic pressures have grown. But in recent weeks Virginia's politicians have been discussing it with renewed zeal. Last month Bob Marshall, a local Republican, submitted a bill to the local assembly calling on the state to study whether it should create its own “metallic-based” currency.
This was not because Virginia is seething with secessionist impulses (dozens of different, local currencies used to circulate in America in the 19th century before the Federal system came into play). Instead, what sparked the bill is fear. “Unprecedented monetary policy actions taken by the Federal Reserve... have raised concern over the risk of dollar debasement,” the bill declares, noting that “foreign threats to the United States in the form of sophisticated cyberattacks have begun to target banks and financial institutions... with the aim of undermining consumer confidence and seriously disrupting the functioning of our nation's economy.” Hence the need to create a back-up, “trustworthy” monetary unit to “restore confidence and civil order” - just in case disaster strikes in the form of hyperinflation or those Chinese-cum-Iranian cyber geeks.
What should we make of this? Most mainstream economists and policy makers would undoubtedly scoff. Indeed, when the bill was first introduced a couple of weeks ago, the main paper in Richmond, Virginia, complained that Marshall had created “unintentional hilarity”, and might turn the state into the butt of jokes on the popular Saturday Night Live television show. There have been plenty of anti-establishment, doomsday theories floating around America before - indeed, this streak is so well ingrained that Barnes & Noble sells a “survivalist” magazine offering tips on how to flee an urban mob or bury food, and thus survive the catastrophe that will hit America “with mathamatical (sic) certainty”. And since the idea of a state adopting its own gold-backed currency flies in the face of modern orthodoxy, it might seem doubly easy to ignore this move as just the latest workings of the “loony fringe”.