US States are starting to turn to gold to protect State holdings
Colin Plume: 4-4-2024
Many US States are messing up. They are allowing crime rates to go up, shooing away investors, and spending on things that aren’t helping their residents. Then there are states like Utah that are looking into the future and putting their residents’ welfare at the forefront.
Their first move? Buy gold.
On Thursday, Utah Governor Spencer Cox signed a bill into law granting authority to the state Treasurer to safeguard state funds by allocating a significant portion to physical gold and silver.
Championed by Rep. Ken Ivory, House Bill 348 enables the Treasurer to allocate up to 10% of certain state reserve accounts to precious metals. This move aims to mitigate the risks of inflation and financial instability, as well as potentially generate capital gains when measured in Federal Reserve Notes.
Utah’s Treasurer faces limited options for managing state funds, making this legislation essential. Currently, the state’s reserves are predominantly invested in various debt instruments, such as treasuries, municipal bonds, corporate bonds, and agency debt. However, these investments carry risks, particularly due to their vulnerability to inflation and negative real interest rates.
The legislation specifically applies to several state accounts, including the State Disaster Recovery Restricted Account, General Fund Budget Reserve Account, Income Tax Fund Budget Reserve Account, and the Medicaid Growth Reduction and Budget Stabilization Account.
Jp Cortez, executive director of the Sound Money Defense League, emphasized that enabling the Treasurer to invest in precious metals strengthens Utah’s ability to protect taxpayer funds and residents against inflation and counterparty risks.
Allocating funds to gold and silver aligns with Utah’s goal of safeguarding against financial risks. It’s considered a safe and liquid investment option. Historically, precious metals have served as a hedge against inflation, debt defaults, and stock market downturns, while also enhancing overall investment returns and reducing portfolio volatility.
Advocates like the Sound Money Defense League and Money Metals Exchange have been advocating for states to hedge reserve and pension funds with gold and silver, often requiring enabling legislation.
Utah joins states like Texas and Ohio in acquiring gold reserves. Similar legislation, such as HB 348, has recently passed in Tennessee and is being considered in Missouri, Idaho, and West Virginia.
Globally, Central banks have been increasing their gold reserves amid growing concerns about the U.S. dollar’s stability.
Moreover, HB 348 mandates the Treasurer propose additional legislative measures by October 2024 after conducting a study on the role of precious metals in enhancing economic security and prosperity for the state, its residents, and businesses.
Utah, ranked seventh on the Sound Money Index, has been at the forefront of promoting sound money policies since passing the Utah Legal Tender Act in 2011, also sponsored by Rep. Ivory.
The enactment of HB 348 follows Wisconsin’s recent decision to eliminate sales taxes on gold and silver purchases, making it the 44th state to do so.
This is just the beginning. More states are either increasing their gold holdings are starting to buy. Ask yourself, if even state governments are using gold to protect the state’s wealth, why aren’t you? LINK
