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Economic Turmoil Resulting in New Sound Money Allies, Initiatives
Rep. Alex Mooney Gives House Floor Speech on His Gold Standard Restoration Act
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Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Well, it was a week of generally positive action in precious metals prices, as gold and silver continue to consolidate their impressive late November gains.
As of this Friday recording, the whole precious metals complex is up.
Gold is trading at $1,811 up 0.3% for the week
Meanwhile silver remains at its highest level since April and is putting in a nice advance here today. The white metal was flat for the week through Thursday but now trades at $23.85 an ounce and is up 2.1% since last Friday’s close.
Sound money, in the form of physical gold and silver, look to be ending the year on a bullish footing.
Meanwhile, things are looking positive on the sound money public policy front as well, thanks to some big wins at the state level in 2022 combined with renewed enthusiasm among our legislative allies as we head into the 2023 legislative season.
Looking back on 2022, one reality has emerged: Sound money is clearly a winning issue at the state level.
At a time of record-high inflation and geopolitical uncertainty across the globe, with some prompting from Money Metals Exchange, the Sound Money Defense League, and our Money Metals customers, several state legislatures have taken tangible steps to better enable citizens to acquire, sell, and/or use gold and silver.
Of course, back in 2021, we prompted Arkansas and Ohio to repeal their sales taxes on gold and silver coins, bars, and rounds. And the Buckeye State also acquired almost $1 billion worth of physical gold to help protect its Ohio Police and Fire Pension fund.
2022 brought three fresh new legislative victories in Tennessee, Virginia, and Alabama.
All told this year, sound money allies introduced bills in 11 states to remove sales and income taxation on the monetary metals, create state depositories, and/or protect state pensions and reserves with an allocation to physical gold.
However, Money Metals’ policy efforts aren’t limited to state legislatures.
Congressman Alex Mooney of West Virginia introduced three federal bills that we are backing. The most high-profile bill is the Gold Standard Restoration Act which would define the dollar as a fixed weight of gold.
Another Mooney bill would direct the Government Accountability Office to fully audit, inventory, assay, and otherwise account for America’s gold reserves every five years.
And a third bill exempts the monetary metals from the federal income tax.
Last week, Congressman Mooney addressed the U.S. House of Representatives on the Gold Standard Restoration Act, a bill that could theoretically halt Washington’s irresponsible spending habits as well as the currency debasement caused by the Fed’s creation of money out of thin air.
Rep. Alex Mooney: Madam Speaker, the United States is facing an inflation and debt crisis not seen in over 40 years. West Virginians have seen the value of their savings erode before their very eyes because of reckless tax and spend policies. We know who's responsible for the current inflation crisis, but what in our country's history has allowed us to get to this point?
The answer can actually be traced back to 1971, when President Nixon took United States off the gold standard. The gold standard means tying the dollar directly to the value of gold. Under the gold standard, any American would be able to trade their dollars for a fixed amount of gold. By linking the dollar to the value of gold, the money supply could only be increased if the supply of gold increases.
This connection protects the purchasing power of your dollars. That is why I introduced legislation to return the United States to the gold standard. Had we been on the gold standard or some other fixed standard, we'd not be in the inflation crisis we're in today. I look forward to working with the Republican majority to make sure this issue gets attention. Thank you, and I yield back.
In addition to coordinating and deploying legislative efforts across the nation, the Sound Money Defense League joined with Money Metals Exchange for the sixth-straight year to provide six exceptional students with $10,000 in tuition assistance.
As part of this educational and outreach effort, we’ve set aside 100 oz of physical gold to help fund scholarships to outstanding high school, undergraduate, and graduate students who display deep understanding of economics and monetary policy.
This year, almost 100 high-school and college students submitted essays on sound money related topics – and the top six were selected with the help a blue-ribbon committee of free-market economists and sound money thought leaders.
This is an annual scholarship, so if you know of a student who might be interested, the next deadline to submit applications is next October. More information on the sound money scholarship is posted at MoneyMetals.com
Meanwhile, with Americans facing staggering inflation rates, we’ve released the 2023 edition of our Sound Money Index, ranking all 50 states on their policies in this area of growing importance.
Of course, the root of the problem is at the federal level, but there are some things states can in fact do to promote sound money. And although no state is anywhere close to becoming a sound money “promised land,” some are certainly better than others.
According to the 2023 Sound Money Index, for example, Wyoming and South Dakota are currently the most pro-sound money states in the U.S. And Vermont, New Jersey, and Maine are dead last.
The index’s scoring system examines sales and income tax policies involving precious metals, whether a state recognizes the monetary role of gold and silver under the U.S. Constitution, whether a state holds pension, reserves, or bonds in gold or silver, whether a state has imposed precious metal dealer and investor harassment laws, and several other criteria.
The 2023 Sound Money Index also includes a new 13th ranking criterion – Specie Tender Mechanisms. This category examines whether a state has created a system to remit and accept gold and silver for payment of fees and taxes. Currently no state has, but that could change in the not-too-distant future.
Vermont, New Jersey, Maine, Kentucky, Mississippi, Wisconsin, New Mexico, and Hawaii are the worst states on sound money. That’s primarily because these states continue to charge sales taxes on purchases of gold and silver, with many of those states also maintaining tax rates above the national average. While 42 states now fully or partially exempt gold and silver from sales taxes, these 8 remaining states are now way out on the fringe.
As the New Year approaches, so does the 2023 legislative session. The Sound Money Defense League is targeting the elimination of more state sales and income taxes on gold and silver... but we need your help to make it happen.
Without a doubt, grassroots participation in our past efforts has made the difference in legislative battles.
Of the 8 states that still impose a sales tax on purchases of precious metals, we expect there will be exemption bills introduced in Kentucky, Maine, Mississippi, and Wisconsin.
Legislative allies in a handful of states are also aiming to eliminate state-level capital gains taxes on sales of precious metals coins and bullion, including Alabama, Michigan, Washington, Oklahoma, South Carolina, West Virginia, Arkansas, and Idaho.
Idaho could do even more – after a whole new batch of liberty-minded legislators got elected this year. The Gem State will consider investing a portion of state funds in physical gold. And Tennessee and Wyoming may do so as well.
Wyoming is also weighing the creation of a system where the state treasurer establishes a mechanism for accepting and remitting payments in gold and silver.
If a state were to establish infrastructure to transact in gold and silver, it would have a real leg up – and so would its citizens – if or when the collapse of the Federal Reserve Note accelerates.
If you live in any of the states I have mentioned, please be on the lookout for the legislative alerts Money Metals will be sending to you by email or mail in the coming months. Without a doubt, grassroots pressure from concerned, in-state citizens is essential if we are to continue achieving victory in these legislative initiatives.
Promoting sound money at the state and federal level is one way Money Metals strives to serve our customers, our industry, and our nation. These efforts also stimulate much-needed discussion about the vital and historic role of gold in silver in securing our liberties, restraining debt, and preserving one’s savings and wealth.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.