Gold’s Relevance Skyrockets as More Policymakers Turn to Gold

Mike Maharrey: Greetings. I'm Mike Maharrey, a reporter and analyst here at Money Metals, and I'm joined today with my good friend. And I'm not just saying that he's a good friend, Jp Cortez. He's the director of the Sound Money Defense League and has some exciting news about some sound money stuff that's going on out there at both the state and federal levels. How are you doing Jp?

Jp Cortez: Mike! It's great to be back, man. I'm doing well. How are you?

Mike Maharrey: I'm doing great. It's always fantastic to have you on the show. Always love talking to you. It's exciting to kind of be able to see how policy interacts with the whole idea of sound money and it's kind of your shtick. And we just had a bill that was signed into law in I believe Alabama. Tell me about that.

Jp Cortez: That's exactly right, Mike. Yesterday, governor Kay Ivy in Alabama signed senate Bill 130into law. This bill was carried by Senator Melson and it reaffirms gold and silver as constitutional legal tender for voluntary use. It's a symbolic bill that really is just the next step in Alabama's now long history of supporting sound money legislation carried by Senator Melson all three times. This is now the third bill since 2018 that Alabama has passed reaffirming gold and silver as sound money allowing or removing disincentives to its use and its purchase. So in 2018, we expanded a sales tax exemption on the purchase of precious metals and expanded the definition so as to include more items of precious metals. Last year we eliminated the capital gains tax on the state capital gains tax on precious metals in Alabama. So in Alabama, functionally there is no friction by the state imposed on precious metals.

When you buy it, it's sales tax free, and when you sell it, the state isn't going to come knocking for their cut while the feds still do of course. But the state itself has said, no, we're not taxing precious metals in this way. And ultimately that's what gets it to function as money that makes it possible to function as money. And then this year, of course, just yesterday with Governor Ivy signing this legal tender bill into law. So it's an exciting time to be in sound money policy and Alabama just stays regularly and steadily passing sound money policies.

Mike Maharrey: Yeah, one of the things I like just from kind of a political observer wonk, is the way that they've approached this with this step-by-step political strategy. They're not trying to do everything at once. They get one little piece in place and then they take that foundation and they build on that. And we're seeing this kind of steady building. We've seen the same of thing in Utah where they've taken various steps over the years to I guess kind of create a better playing field for sound money, which it's really what they're doing. And you mentioned that this is kind of a symbolic bill, but I think it's still important in that it kind of tells us something about where people's heads are right now in terms of our monetary system, doesn't it?

Jp Cortez: It absolutely does. This isn't coincidence, and while this is symbolic, this doesn't have maybe the practical effects that removing taxes on precious metals might. Again, this is a giant step in affirmation that gold and silver are indeed money.

So, regardless of the federal policies at both the federal level and the Federal Reserve, that largely cause all this dysfunction states are not standing by to let their citizens wither away. They're actively taking steps to be proactive, to restore sound money, to restore the constitution to their state. So yeah, this is a great win in Alabama and you made an excellent point that really speaks to the step-by-step strategy to doing sound money legislation. Listen, this is true not just of sound money legislation. This is true of really all types of policy

There are different strategies to implementing or to hopefully passing legislation. You can take giant bites at the apple. You can include everything into one piece of legislation and hope that passes. Or you can take small incremental steps and you stack those victories and then ultimately before you look, a couple years go by and you look again, and Alabama in this case is a sound money powerhouse, and that's kind of the approach that the Sound Money Defense League has taken with the backing of money Metals exchange. Of course, that's the approach we take state to state. And so many states now that have removed sales tax, that have removed capital gains tax, that have reaffirmed gold and silver as legal tender are now looking to next steps.

How do we establish a gold reserve? If we establish a gold reserve, where would we store it? How would we go about doing that? And states are now asking these questions because there's a lot of talk of de dollarization, but it's not just adversaries to the United States. If you look closely, even states themselves are moving away from dollar denominated debt and can you blame them? How can anyone invest? How can anyone start a business with so much going on? So much volatility in the world right now, gold and silver act as a hedge against all that. That's true for individuals, that's true for countries and it's true for states as well.

Mike Maharrey: Yeah, absolutely. It's pretty cool too. You talk about them kind of building and looking to next steps. I was looking at a bill the other day, I think it was in Arkansas, where now they've affirmed gold and silver as legal tender just as Alabama just did. And now the next step that they're looking at is creating a system where vendors who work with the state will actually be able to use gold and silver to make and receive payments. So if that passes, then they're actually putting a practical process in place that will further facilitate the use of sound money if people choose to do so. And I think that's kind of a key to this. It really comes down to human action. I mean, the states can kind of make the playing field better mow the grass, so to speak, but ultimately it's up to people to start using sound money. And I think that's kind of the beauty of a bill, like the legal tender bill in Alabama, because people are going to wake up and they're going to see in the news, ‘Hey, our state just affirmed gold and silver is money.’ It puts that top of mind and creates the impetus and the momentum for people to actually use sound money, which is going to be to their benefit in the long run.

Jp Cortez: And it supports an entire industry. These are businesses in the state that now feel that they're being protected or maybe even promoted by the state. It's individuals who maybe have questions about investing who maybe aren't sophisticated enough to understand required distributions or how IRAs work, but they do understand that gold and silver have been money for thousands of years, and now the state is actively removing impediments to investing in gold and silver. So yes, individuals in this state that are looking around and saying, wait, my dollar isn't holding its value the way it used to. There must be some sort of alternative and now look at gold and silver and enter into this space without disincentives from the government and without any of the other entanglements that come with traditional types of investment or things that are denominated in dollars, things that are subject to inflation rates and counterparty risk. So more and more states are monetizing gold and silver, not just through the functionality of removing the debris and the thistle that stand in the way of people using them as money, but also psychologically reaffirming and making statements, making proactive statements. Then gold and silver are indeed money.

Mike Maharrey: Yeah, absolutely. So Alabama's not the first state this year to pass down money legislation, if I am correct. What else has been going on and what other things have the Sound Money Defense League been helping to push through?

Jp Cortez: It's been a very busy year for us at the Sound Money Defense League. It started in Wyoming. Wyoming earlier this year passed Senate file 96 sponsored by Senator Eide, and this bill established a multimillion dollar physical gold reserve for the state of Wyoming. They're previously Utah has established a physical gold reserve. Ohio has established, has invested in paper gold, Texas, famously once physical gold, and so Wyoming is the state taking the next step. So they've passed this legislation, they've empowered their treasurer to consult with third party vendors, security insurance, all of these things that go into caring for an asset like gold and allowing the state treasurer to invest in this. So that was a huge win. Wyoming starting in 2018 with the passage of their legal tender act, which we worked on closely with the representative Edwards, the late representative Edwards, to pass this bill that reaffirmed gold and silver as legal tender and removed taxes on it. And now you can see, just like you were saying this step-by-step thing, several years later, the state has now established a physical gold reserve and the state is in a better position to protect the states and its own state coffers, or excuse me, its citizens and its own state coffers with gold and silver.

And that's I think a big thing that is underappreciated is how much in many cases states, whether we like it or not, act as taxpayer funded hedge funds. There are states that look to investments for the revenue that they bring in and investments, returns make up a large part of a state's operating budget. And to that end, states are regularly chasing returns. They're chasing yield, and that means investing in dollar denominated debt. That means investing in risky assets in some cases, but in the case of many states, it also means investing in assets with real negative rates of return. So to the extent that the state is going to be investing in things, shouldn't the baby be investing in constitutional money and money without counterparty risk in money that they can store in their state? So encouraging states to do this is the next step, and Wyoming has enacted a law now doing this and several other states are considering legislation to do the same thing. Just 48 hours ago I was in Nashville, Tennessee testifying on legislation to make Tennessee the next state that establishes a gold reserve. They're looking at about $60 million over there to begin their reserve fund with.

Mike Maharrey: Didn't last year, didn't they kind of set the stage for that. Now what they're doing is kind of trying to figure out a way to put that into practice, right? Again, Tennessee, step by step.

Jp Cortez: Tennessee is another fantastic example of a step-by-step process. When we started the Sound Money Defense League in 2014, and when we started working in Tennessee, I thought to myself, Tennessee's a red state. Why is this so difficult to get past? And this was just on the sales tax issue.

It took us many, many years of going be traveling to Nashville, me communicating with in-state supporters and organizations in the state trying to get this bill passed, and what started with a single sales tax exemption on the purchase of precious metals, the gates opened and water started flooding in. So it started with sales tax, then it became income tax, and now we're seeing that Tennessee has passed multiple bills over the last couple of years doing just that, setting the stage for what will be the Tennessee Gold Reserve. So all of this happens incrementally, and each win individually matters.

And so now we can see that Tennessee has reached that state where they're actively considering, and hopefully this year will be the next state to pass a bill like that. Tennessee, excuse me. So it started in Wyoming, passing this gold reserve. Next was Idaho. Idaho is another state that we've worked in for a long time, and this year they've passed two sound money bills. The first was House Bill 40. This was actually the state tax cut. It was the largest tax cut in state history. I believe it was $240 million that was cut and given back to taxpayers. Included in that tax cut was a capital gains exemption on the sale of gold and silver. So now in Idaho, when you sell your gold and silver, you don't have to track your cost basis. You don't have to go to the government and tell them what you gained and then pay taxes on that every year. You can simply sell or use your precious metals without the state butting.

Just weeks later, the ink had barely dried on the governor signing his signature on House Bill 40 when Idaho enacted House Bill 177. This was a bill, much like this bill in Alabama that we started talking about that reaffirmed gold and silver as legal tender. This is Idaho again, making a symbolic but important step towards monetizing and making a positive statement towards the entire industry towards anyone in the state who might be considering investing or using gold and silver as a way to protect themselves and their savings against dollar devaluation. Lastly is Kentucky. And if you remember Mike, there was a whole drama over the last couple of years in Kentucky what started as us working to exempt the sales tax from precious metals.

Then that after years of effort was finally approved by the legislature, made it to Governor Beshear. Governor Beshear vetoed the bill. He said, if you have enough money to buy gold and silver, you should be paying sales tax. He sneered that at investors of gold and silver in the state. The Attorney General came out and said, this veto is illegitimate. It's unconstitutional because he tried to use veto power on a bill that he did not have constitutional power to veto. The Attorney General said. So the legislature said so, but still, governor Beshear directed his departments to collect the tax against precious metals dealers in the state with penalty of fines and legal action for any dealers that did not collect the tax. This put dealers in a very, very tenuous situation. To that end, liberty firebrand representative TJ Roberts was working with the Sound Money Defense League and introduced a bill that not only not only made purchases of gold and silver sales tax-free retroactive to the original passage date in 2024.

He also attached stiff penalties to Governor Beshear personally and his departments that for wrongful taxation, he included or created a system that would entice taxpayers to sue the state of Kentucky for wrongful taxation of a gold and silver. The legislature passed this bill overwhelmingly, governor Beshear unsurprisingly vetoed the bill, but the legislature wised up this time and decided, no, you're not going to get away with it. We are going to override your veto. And they did that. As of today, as of a couple of weeks ago now in the Bluegrass State, you can buy Precious metals sales tax free. Kentucky is hopefully one of these states where incremental progress will happen as we're already in contact with the sponsors there on future legislation on what the next steps should be in Kentucky. So I don't think it'll be a one and done in Kentucky either. So those four, and then most recently, just last night, governor Ivy and Alabama brings us to five wins so far in 2025 that have all continued to move the ball forward for sound money. Last year we talked about how it was our most legislatively successful year of our existence. In our 10th year, we passed seven successful projects. This year we're already at five and the season hasn't ended yet. So we're hopeful there's more to come.

Mike Maharrey: Yeah, I was about to say, we're, I guess, probably about halfway through what you might call the legislative seasons. Most state legislatures meet in the first part of the year. Usually some of 'em have already wrapped up, but some of them go through May or June. So what else have you got on the horizon? What are you working on right now? I know that you burn a lot of miles actually going and testifying before these various committees and stuff and really doing a lot of the groundwork, which thank you for that. So what are your travel plans here in the next few weeks?

Jp Cortez: Well, so much of that, my ability to do that comes from the support that we receive from Money Metals Exchange. And I just want to make a quick point here. There is no other precious metals dealer in the country that supports sound money the way Money Metals does. Absolutely. All of this legislation that we've passed, the difference that we've been able to make on the policy level is not, it comes from the funding obviously that Sound Money Defense League receives, but money metals and their ability to leverage their customer list, their willingness to reach out and activate grassroots to create in-state advocates from people who have an interest in this industry in these items, their ability and their capacity to do that is appreciated. And without their support, the Sound Money Defense League wouldn't be able to do this.

As far as what's still on the docket, like you mentioned, it's about May or June when a lot of these legislatures wrap up. So there are still irons in the fire. In Alaska, for example, we're getting ready to have a hearing on a bill that we've worked on for a couple of years now that would eliminate sales tax for localities, municipalities. The state of Alaska does not have a state sales tax. It's one of the five states in the country that does not charge a state sales tax, but municipalities, boroughs, local governments, they still can't impose a sales tax. So this bill would reaffirm gold and silver as legal tender, just like the Alabama, excuse me, the Alabama bill does, but it would also preempt any localities from charging sales tax on precious metals staying on that sales tax theme.

The state of Maine is still considering their sales tax exemption on precious metals. This was a bill two years ago that failed by one vote. Hopefully we will see there's been more progress. We've had more support this year. We have bipartisan support this year, so hopefully in the next coming weeks we'll see progress on that front. In Iowa, they're still considering an exemption on capital gains on precious metals there for their state capital gains tax. I mentioned earlier that I was just in Tennessee working to make Tennessee the next state to consider or to establish a state gold reserve. And these are just a couple of states. There's still a number of states that are active on top of that, so there's still plenty of action going on. The number can still get higher here from just five. And I think importantly, this speaks to a movement that is burgeoning.

What started when we started in 2014 to maybe a handful of bills even being introduced throughout the country. You'd be lucky to get one of these bills passed, maybe two. What started there is now a movement that is nationwide, that is widespread and that continues to grow steam.

Mike Maharrey: Yeah, it's amazing. I kind of watched the legislation as well, and it's really been striking over the last, really the last two, maybe three years, how many different states have introduced bills and considered bills, and some of 'em get really radical. We're seeing bills introduced to establish bullion deposit depositories at the state level, which Texas did back in I think 2018. But you're starting to see more and more of these types of things. Some might call them radical, but it just goes to show just how much interest there is in this and it makes sense. I mean, we've just gone through an extremely painful inflationary period where we all felt it in our pocketbooks. We saw the devaluation of our money every time we went to the grocery or to the hardware store or wherever we went. So, it's no wonder that there is this, as you put a burgeoning interest in sound money, and it's really exciting and I'm very, very thankful that there is an organization like the Sound Money Defense League that's out there doing this grassroots groundwork in partnership with Money Metals and other organizations that are helping with the boots on the ground.

It's really an exciting time for sound money, and it's not just happening at the state level. Am I right? You've got some things in the works may be on the national level. That's

Jp Cortez: Exactly right. Since the Sound Money Defense League is obviously very proud of what we've been able to accomplish at the state level, but we haven't entirely ignored the federal level either since, for example, in 2019 and 2021 topic that has been of interest recently, the auditing of Fort Knox and the other places where America's gold reserves are purportedly stored. This was legislation that we worked in crafting with. Then congressman Representative Alex Mooney from West Virginia, and he worked to introduce that bill in 2019 and then again 2021. And in 2024, he also introduced reintroduced the Monetary Metals Neutrality Act, which would eliminate the capital gains tax on gold and silver at the federal level, which would be huge because the reason that states even tax precious the capital gains tax is because most states start with the federal number. So, if the federal tax were removed, many states simply by default would not tax precious metals unless they affirmatively passed policy or pass regulation that did. So, a legislation like that would be huge.

But like I mentioned right now, there's a lot of attention on this issue of America's gold reserves. And of course, why wouldn't there be? There's confidence in America's dollars shaking nationwide, or excuse me, worldwide central banks are stockpiling gold at record rates. There's talk about gold-backed currencies being established. So there's a lot of interest in whether or not America's gold holdings the greatest monetary asset the world has ever seen are in fact there, the way the United States says they are. So legislation to audit the gold would be incredibly important. It would be incredibly useful at this time, and I think it's important to note that the theatrics cannot suffice for an audit. Elon Musk has tweeted more than once about how great a live stream would be, how great it would be to get a camera and go through to show America the gold bars.

I strongly urge America not to be fooled by what would be a made for Hollywood theatrical showing. We don't need that. That's what happened in the 70s. That's what happened the last time those vault doors were opened. Instead, we got a camera. We got pre-approved containers that were opened. A bar of gold was shown. Everyone smiled. They took pictures, they put the gold back, and that's all it was. There was not a single assay. There was not a single weighing of a bar. There was no serial number matching. All of these things are important. A full accounting and a full assay is what is required of America's gold holdings, and nothing short of that should suffice. So any legislation should include, of course, the details of what that assay and accounting should look like. Any future legislation should include a process for refinement of America's gold.

A lot of America's gold is not currently liquid. It is. It does not meet global market standards. And then I think lastly would be a full accounting. Of course, the gold is there, but gold sitting in the same room can change hands a million times. It can change ownership over and over. So who actually owns the gold? I think that's an important question. Through leaps leases, through swaps, through any other encumbrances, we want to know who owns the goal. So any legislation on this front should include those facets, and we're excited and hope that in working with members of Congress now that we're able to capitalize on this energy and this question that is surrounding America's gold holdings and introduce more federal legislation to that end.

Mike Maharrey: Yeah, absolutely. And you'll get some people that kind of poo-poo this idea. They're like, oh, they audited it. The gold's there, and that doesn't even really make sense from an accounting brain, and I studied accounting. When you have a monetary thing like gold, you audit constantly, right? It's not just a one and done. You don't just say, ‘Oh, we audited it. It's fine.’ You have to go and have ongoing processes in place. And as you mentioned, it's not just counting bars, it's making sure that the bars are real, making sure that the gold is up to the standard that it needs to be. And I think you hit the nail on the head. The most important thing is who actually is in control of this gold, the paper trail, again, the encumbrances and leases and all of these things that can be placed on a bar of gold that's sitting in the same place.

So you're absolutely right. Anybody who tries to tell you, dear listener, that we don't need to audit the gold, we did it back in 19-whatever. That's not what auditing is. And I think that's really important because there are a lot of people out there in the mainstream that just want to point and laugh, and it almost makes you wonder what are they scared of? I mean, why would you not want to audit it? What is the downside? The only downside that I can think of is there's not as much gold there as they're saying, or it is encumbered in ways that we don't realize. And so that should make people nervous.

Jp Cortez: Absolutely. Absolutely. And I think the encumbrances obviously matter, and a full audit in accounting is obviously what it's going to take here. Nothing else. America can't be fooled again by a fake audit, right?

Mike Maharrey: Yeah. I mean, if I get audited by the IRS, they're not going to accept that. Well, I counted my bank account last month. Everything's good. Nobody would accept that.

Jp Cortez: And frankly, America has done nothing to earn the benefit of the doubt of not having an audit. Since 1913, they've established this shadowy hand private or not government institution in the Federal Reserve Bank in 1933. They criminalized owning gold and silver. Since then, they have perpetually devalued the money and weaponized and used it as a cudgel around the world. So the money managers, the people in charge, there's no real reason to give them the benefit of the doubt. They have not earned them. And fortunately that's the benefit of an audit. I don't have to believe you, or maybe I do. I need to see the audit.

Mike Maharrey: Yeah, right, exactly. Show me the paperwork, show it to me, and then we can all move along. Hopefully well appreciate so much the work that you're doing. Before we go, I do want you to let folks know where can they follow the Sound Money Defense League and what are the links, and then also briefly let people know about the Sound Money Index that you've created.

Jp Cortez: Absolutely. So, the Sound Money Index is a guide, a ranking that, a scorecard that we put out every year, the Sound Money Defense League that ranks all 50 states by their pro or anti sound money policies. So you want to know the states at towards the top of the list are the ones that have removed sales tax removed capital gains. They have reaffirmed gold and silver as legal tender. They might have a bullion depository. They might invest or hold physical gold on their balance sheet. These are the traits, the characteristics of states that you'll find towards the top of the index. Towards the bottom of the index, you'll find that these are states that generally have high levels of taxation generally that have not taken steps to remove taxes on precious metals. They have not established a depository, they have not taken steps to reaffirm gold and silver's role as constitutional money as prescribed by Article one Section 10 of the US Constitution. So this is a tool for lawmakers and interested parties to help them determine which states are the best at this and where improvement needs to happen. With the passage of legislation in Alabama, Kentucky, Idaho, to Twice and Wyoming, we're going to see that these four states are going to move up quite a bit

In next year's ranking. So we're very excited to put out that scorecard. Later this year, we're going to see a lot of the ranking shaken up, and you can find that on the Money Metals website, the Sound Money Index. You can Google that and you can find our website SoundMoneyDefense.org. We can link down at the bottom to the index itself, and you can find us on Twitter (X). The Sound Money Defense League is @SoundMoney_ Def and Money Metals is @MoneyMetals. I am JP Cortez. You can find me @JPCorte27.

Mike Maharrey: Well, awesome. Again, just big two thumbs up for all of the hard work that you're doing, and obviously it's bearing fruit, the United States are becoming a little bit more sound money freely or sound money friendly every single day. A lot of that is due to the work that you're doing. So thank you so much. Thank you for coming in at the last minute to talk about everything that's going on. Appreciate you taking time out of your day, and we'll look forward to having you back. Once we wrap up the legislative season, we can kind of do an overview wrap up once we move through the final weeks of these legislative sessions. But don't work too hard out there and keep piling up those frequent flyer miles. Thanks, Mike. It's great to talk to you again. I'm looking forward to chatting again soon.

Jp Cortez: Alright, thanks a lot.