Libertarian Leanings

Tennessee Governor Signs Bill to Protect State Funds with Gold and Silver

By Jp Cortez, Money Metals News Service

Nashville, Tennessee – Tennessee Gov. Bill Lee has signed a measure into law that would empower the State Treasurer to invest state funds in physical gold and silver.

House Bill 1479, introduced by Rep. Bud Hulsey, passed out of the House of Representatives on Monday with a 98-0 vote. A week later, the same bill received a 33-0 vote in the Senate.

In an exclusive comment to the Sound Money Defense League, Rep. Hulsey said, “Gold and silver have been real currency for the past 5000 years. [Passing HB 1479] not only provides a hedge for the State, but gives us varied options while facing a shrinking dollar and the threat of CBDC’s.”

Passing with strong grassroots support and backing from the Sound Money Defense League and Money Metals Exchange, the bill defines “bullion” and “specie” and provides that “subject to appropriation, the state treasurer may purchase and sell gold or precious metal bullion or specie that will be directly owned by the state, and in the custody of the state treasurer.”

Additionally, the twin bills would allow the state treasurer to “make and enter into contracts, trust instruments, agreements, and other instruments with a person to effectuate this section, including, but not limited to, financial institutions, accountants, auditors, attorneys, consultants, and other contractors.”

Lastly, the measure calls for “physical gold and precious metal purchased under these acts to be custodied by the state treasurer in a state depository, and maintained in a vault within the state depository's banking facilities in accordance with accepted industry standards for secure storage, and within the geographical boundaries of Tennessee.”

States that help set up the infrastructure to protect state funds with the monetary metals will help further to bring gold and silver into use as an alternative to the inflationary paper-money system, as well as buttressing state funds, many of which are invested in risky paper assets.

Rep. Hulsey continues to be a powerful voice for sound money in Tennessee, earning him the 2022 Sound Money Legislator of the Year award last year for his tireless work on eliminating Tennessee's state sales tax on gold and silver.

After ending the state sales tax on gold and silver, Tennessee shot up the 2023 Sound Money Index rankings to earn a 9^th place finish. Tennessee also recently ended its state income tax on sale all capital assets, including gold and silver.

Several other states are considering their own sound money bills this month, including Alaska, Idaho, Maine, Missouri, Mississippi, South Carolina, Vermont, Iowa, Kentucky, Oregon, and more.

   

Jp Cortez is a graduate of Auburn University and a resident of Charlotte, North Carolina. He is the Policy Director of the Sound Money Defense League, an organization working to bring back gold and silver as America's constitutional money. Follow him on Twitter @JpCortez27

This Week's Favorites — Admittedly Sparse

...from Power Line 

See the rest here.

Goose, Meet Gander

NEW: The same students who plastered the names and faces of the Stanford Federalist Society all over the school are now demanding anonymity from the Free Beacon.

They say we've violated their right to privacy by identifying them.

You can't make it up.🧵 https://t.co/ZESNwGzLl1

— Aaron Sibarium (@aaronsibarium) March 17, 2023

Chinese Firm Paid Hunter, James, and Hallie Biden — but The Big Guy Got His 10%

10% For the Big Guy... pic.twitter.com/6PjzFOsUAr

— Joe Borz ❤🇺🇸❤ (@GiJoe1699) March 15, 2023 

Gold, Silver, and Rates Gyrate

By Mike Gleason, Money Metals Exchange

As the Fed signals further rate hikes ahead, precious metals markets are probing for support levels.

Gold prices currently come in at $1,866 an ounce essentially unchanged now for the week as of this Friday recording. Silver, meanwhile, was getting slammed this week through Thursday but is getting a bit of a bounce here today and is now showing a 3.8% weekly loss to bring spot prices to $20.66 an ounce. Platinum is off 2.6% to trade at $967. And finally, palladium is down 4.8% since last Friday’s close to check in at $1,429 per ounce.

Metals markets struggled after Federal Reserve chairman Jerome Powell delivered testimony to Congress.

Powell seemed to walk back his remarks from just a few weeks ago when he confidently declared disinflation was taking hold. He now says interest rates will have to rise further than previously forecast.

Central bankers have already raised interest rates by 4.5 percentage points over the past year. The Fed funds rate could top out at 5.75% this year, according to some projections.

Before all the turbulence in the banking sector, especially with some big selloffs in regional bank stocks here at the end of the week, the odds of a 50-basis point hike at the Fed’s next policy meeting had jumped, scaring some investors out of equity and hard asset markets.

On Wednesday, Powell spoke before the House Financial Services Committee. He was asked by Republican Congressman Blaine Leutkemeyer about threats posed by Russia and China to the U.S. dollar’s status as world reserve currency. Powell’s response included a whopper about the dollar retaining its value.

Rep. Leutkemeyer: In the wake of Russia's unprovoked invasion of Ukraine, the Fed took action to prevent the Kremlin from accessing more than $300 billion in reserves, roughly half of Russia's reserves. However, this led to an accelerated effort by countries like China to de-dollarize their official foreign exchange reserves. Just last week there was an article in The Wall Street Journal titled Russia Turns to Yuan in an Effort to Ditch the Dollar. Are you concerned about these actions by Russia and China to establish different reserves and conduct transactions in non-U.S. dollars?

Jerome Powell: So, the U.S. dollar is the widely accepted and really the only serious candidate for the world's principal reserve currency, and that's because of our democratic institutions, our liquid markets, the rule of law, and all those kinds of things. And also, the fact that the dollar has held its value over time.

It’s a bit much for Powell to boast about the Federal Reserve note retaining its value at a time when inflation is still raging. For the past two years, the Fed has failed to achieve price stability by its own definition.

Of course, rising prices are a direct consequence of the currency losing value. Since the Fed’s creation in 1913, the U.S. dollar has lost roughly 98% of its purchasing power. Put another way, it has retained only 2% of its value over time.

Contrary to what Powell suggests, there is an alternative competing currency to the U.S. dollar that is held as a reserve asset by other countries around the world. It retains 100% of its purchasing power over time. That currency is gold.

In 1913, the gold price was fixed at $20.67 per ounce. The fact that it commands over $1,800 an ounce today isn’t indicative of the yellow metal being any more precious today than it was over a century ago. It’s a reflection of the dollars in which gold is priced becoming steadily less valuable.

Far from being a relic of the past, gold continues to play an important role in the global monetary system. In fact, central banks that are grappling with inflation and growing concerned about the sustainability of U.S. dollar hegemony are stocking up on bullion in record quantities.

The trend of de-dollarization isn’t confined to China and Russia and other U.S. adversaries. Many other countries in Europe, Asia, the Middle East, and Latin America are seeking to diversify away from U.S. dollars.

El Salvador is trying to spearhead a monetary revolution toward a Bitcoin standard by making the cryptocurrency legal tender. However, Bitcoin’s notorious volatility and relatively brief track record as a store of value makes it problematic as a potential primary reserve currency.

No digital or fiat monetary asset offers the solidity and stability of gold. In addition to foreign central banks, some individual U.S. states are also taking steps to mitigate their risk exposure to fiat cash with physical gold.

Several states are currently considering bills that prompt the establishment of a gold reserve.

With inflation ravaging state budgets (as well as family budgets), an increasing number of legislators are realizing monetary metals can provide an important hedge. Bills in Idaho, Tennessee, Maine, Missouri, and Mississippi are under consideration. In fact, the bills in Tennessee, Missouri, and Idaho have already passed out of one legislative chamber.

Far from being the only viable monetary reserve asset, King Dollar is in the process of being dethroned. It may not happen suddenly with a single action or announcement. But the growing demand for sound money among foreign central banks, states, institutions, and individuals will undoubtedly diminish the dollar’s standing while raising gold’s.

   

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

Sound Money Bills Moving Forward Rapidly in Many States

As you read the article below you may notice that New Hampshire is not among the states which are exempting precious metals from taxation.  That is because New Hampshire has neither a sales tax nor an income tax.

By Stefan Gleason, Money Metals News Service

Because there is so much activity happening at the state level with respect to sound money legislation, here is a quick update on some of the most important bills that are currently pending.

SALES TAX REMOVAL

First and foremost, as to repealing precious metals sales taxes, bills in Mississippi and Kentucky are moving forward quickly. And they may well be heading to each state’s respective governor for signature later this month.

Other full sales tax repeal bills are pending in Maine, Wisconsin, and Vermont – while Minnesota and Alaska are considering an expansion of their existing sales tax exemptions.

There are only eight states that still engage in the controversial practice of taxing all purchases of gold and silver.

Thanks to the ongoing efforts of Money Metals, the Sound Money Defense League, and Money Metals customers who have been lobbying their representatives, we could shrink this list to six or fewer very soon.

STATE GOLD RESERVES

Meanwhile, several states are considering bills that prompt the establishment of a gold reserve.

With inflation ravaging state budgets (as well as family budgets), an increasing number of legislators are realizing monetary metals can provide an important hedge – and that, without doing something, their states are sitting ducks right now. Bills in Idaho, Tennessee, Maine, Missouri, and Mississippi are under consideration.

In fact, the bills in Tennessee, Missouri, and Idaho have already passed out of one chamber of the legislature.

INCOME TAX REMOVAL

The other major category of legislation is removal of state income taxes on the sale of gold and silver. Efforts are underway in Iowa, South Carolina, Kansas, and Missouri to enact this policy. 

Because of the steady devaluation of the Federal Reserve note, "gains" on the sale of gold and silver may not actually be gains in real terms.  It therefore adds insult to injury to force Americans to pay capital gains taxes on imaginary gains.  That's why a few states are attempting to follow the example of Arizona and Utah by doing something about it, at least as it pertains to their state income tax codes.

And finally, Oregon and Florida appear poised to pass bills that reduce burdens on precious metals dealers, enabling them to better serve their customers and provide better pricing.

It's encouraging to see so much interest in -- and support for -- sound money reforms so far in 2023!

   

Stefan Gleason is President of Money Metals Exchange, the company recently named "Best Overall Online Precious Metals Dealer" by Investopedia. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC and in hundreds of publications such as the Wall Street Journal, TheStreet, and Seeking Alpha.

Welcome to the U.S. Capitol Insurrection Tour!

LMAO brilliant work by @stevenvoiceover pic.twitter.com/s08Y88vdLf

— Luke Rudkowski (@Lukewearechange) March 8, 2023

Tennessee House Votes 98-0 to Allow State Treasurer to Acquire and Hold Gold to Protect the State

By Jp Cortez, Money Metals News Service

Nashville, Tennessee (March 7, 2023) – As inflation continues to terrorize the budgets of Americans and states alike, two Tennessee bills empowering the State Treasurer to invest state funds in physical gold and silver are moving quickly through the legislature.

House Bill 1479, introduced by Rep. Bud Hulsey, passed out of the House of Representatives on Monday with a 98-0 vote.

Senate Bill 519, the identical senate-side companion bill introduced by Sen. Frank Niceley, passed out of the Senate State and Local Government Committee today by a unanimous vote of 8-0.

The legislation defines “bullion” and “specie,” as well as explicitly stating that “subject to appropriation, the state treasurer may purchase and sell gold or precious metal bullion or specie that will be directly owned by the state, and in the custody of the state treasurer.”

Additionally, the twin bills would allow the state treasurer to “make and enter into contracts, trust instruments, agreements, and other instruments with a person to effectuate this section, including, but not limited to, financial institutions, accountants, auditors, attorneys, consultants, and other contractors.”

Lastly, the measure calls for “physical gold and precious metal purchased under these acts to be custodied by the state treasurer in a state depository, and maintained in a vault within the state depository's banking facilities in accordance with accepted industry standards for secure storage, and within the geographical boundaries of Tennessee.”

States that help set up the infrastructure to protect state funds with the monetary metals will help further to bring gold and silver into use as an alternative to the inflationary paper-money system, as well as buttressing state funds, many of which are invested in risky paper assets.

SB 519 has been placed on the senate floor calendar for a vote on final passage in the coming days.

Sen. Niceley and Rep. Hulsey are steadfast champions of sound money, earning each of them the 2022 Sound Money Legislator of the Year award last year for their tireless work on eliminating Tennessee's state sales tax on gold and silver.

After ending the state sales tax on gold and silver, Tennessee shot up the 2023 Sound Money Index rankings to earn a 9^th place finish. Tennessee also recently ended its state income tax on sale all capital assets, including gold and silver.

Several other states are considering their own sound money bills this month, including Alaska, Idaho, Maine, Missouri, Mississippi, South Carolina, Vermont, Iowa, Kentucky, Oregon, and more.

   

Jp Cortez is a graduate of Auburn University and a resident of Charlotte, North Carolina. He is the Policy Director of the Sound Money Defense League, an organization working to bring back gold and silver as America's constitutional money. Follow him on Twitter @JpCortez27

Investors May Be Piling into Cash at Exactly the Wrong Time

By Stefan Gleason, Money Metals News Service

Investors have recently been piling into cash. According to a report by BofA Global Research, cash funds last week saw their largest inflows since the pandemic panic of early 2020.

Back then, cash instruments offered little to no yield and, they did serve as a temporary haven from market volatility. But as is typically the case, investors rushed into an asset class at exactly the wrong time.

Investors who are sitting in U.S. dollars now risk missing out on the possible next leg of a precious metals bull market.

In theory, they are being rewarded this time with yields of up to 5% on short-term Treasury bills.

Returns on cash instruments haven’t been this high in over a decade.

Even some Wall Street analysts who normally pitch stocks are touting cash as a superior risk/reward proposition. T-bills, certificates of deposit, and money market funds now return more than the dividend yields on blue-chip stocks without the accompanying volatility of equity markets.

Higher yields are also driving some investors out of precious metals related assets. Gold funds recently suffered outflows of $900 million.

Gold detractors argue that since bullion yields nothing, it less appealing than cash instruments which offer relatively attractive nominal yields.

They fail to grasp two important points, however.

First, a nominal yield of 5% in a high-inflation environment isn’t necessarily more attractive than a nominal yield of 0% in a low-inflation environment.

If inflation, properly calculated, were to average 10% this year, then a 5% nominal return would translate into a 5% real loss!

Second, gold and silver markets can produce spectacular returns during periods of relatively high, and rising, nominal interest rates.

That’s exactly what happened during the late 1970s. It was only when Federal Reserve chairman Paul Volcker jacked up interest rates to punishing double-digit levels that rates finally got ahead of inflation and the great precious metals bull run ended.

Current Fed chairman Jerome Powell hasn’t yet pulled off a similar feat. Despite his claims of “disinflation” taking hold, actual inflation gauges continue to come in hotter than expected while the Fed funds rate continues to lag behind.

That’s called a “negative real return” – and gold loves such conditions.

Meanwhile, bonds and cash instruments are virtually guaranteed to lose real value over time.

The world’s biggest debtor (the U.S. government) is not planning on paying positive real rates to its creditors (bondholders).

Since it must continue borrowing just to pay interest on previously issued debt, the only way the government can keep its Ponzi scheme going is by constantly devaluing what it owes. That means making sure inflation stays elevated above nominal rates.

Of course, there will be times when sitting in cash saves investors from experiencing downside volatility in equity or hard asset markets. But over the long term, holding cash is a losing proposition.

As history shows, over the long term, gold retains its purchasing power better than fiat cash or debt in any form.

   

Stefan Gleason is President of Money Metals Exchange, the company recently named "Best Overall Online Precious Metals Dealer" by Investopedia. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC and in hundreds of publications such as the Wall Street Journal, TheStreet, and Seeking Alpha.

This Week's Favorites

...From Power Line:

 

 

 

 

 

Foreign Nations and U.S. States Worry about Rising Dollar Dangers

By Mike Gleason, Money Metals Exchange

Precious metals markets are attempting to stage a rally this week off oversold conditions even as investors remain skittish over rate hikes.

Multiple Federal Reserve officials came out and suggested they favor additional interest rate hikes while inflation readings continue to come in hot. Some analysts are calling for a return to 50 basis point hikes. But markets continue to anticipate a pause by the summer.

Gold and silver prices can be expected to move in advance of any announced pause or formal dovish turn by central bankers.

For the week, gold shows a 2.0% gain to bring spot prices to $1,855 an ounce. The silver market is up 1.5% since last Friday’s close to trade at $21.29 an ounce. Platinum is popping 6.0% this week to trade at $986. And finally, palladium prices are 0.7% higher for the week to come in at $1,492 per ounce as of this Friday morning recording.

Interest in precious metals among general investors and speculators in futures markets has been lackluster so far this year. Although physical bullion buying has remained brisk, it hasn’t been enough to generate much of a move in spot prices.

But one of the largest sources of gold bullion demand is buying aggressively. Central banks around the world continue to be net accumulators of the monetary metal. They increasingly see the need for hard money in reserves amid geopolitical tensions and risks to the U.S. dollar’s status as world reserve currency.

A more prominent role for gold in the world monetary order could have a significant impact on available physical supply and ultimately prices.

On the heels of record-setting gold buying by central banks in 2022, they are continuing to stock up in 2023. The World Gold Council reported on Thursday that central banks bought 31 tonnes of gold in January. That represents a monthly increase of 16%.

Leading the way in official gold buying were China, which reportedly added 15 tonnes to its reserves, and Turkey. Last year, Turkey emerged as the single largest sovereign gold buyer.

Russia also made some big moves to acquire gold and encourage its trading partners to send and receive payment in precious metal. Countries that find themselves in the crosshairs of international financial sanctions have an obvious incentive to turn to the world’s most universally recognized store of value. So do countries that are grappling with inflation.

Last year, central banks acquired over 1,100 tonnes of gold — a 150% increase from the previous year. The World Gold Council expects 2023 to be another banner year for monetary gold demand.

This doesn’t mean that central banks will be adopting an actual gold standard. Nor does it mean that central bankers will be applying sound money principles.

But they do want to get inflation under control and project stability to the public. And they increasingly view holding U.S. dollars and other fiat currency IOUs in reserves as risky. Gold helps mitigate the risks of holding financial assets.

Individual investors can also hold precious metals in their personal reserves to protect against inflation and other risks to conventional financial assets.

While it is impractical for central banks to acquire silver on a large enough scale to fulfill the same role as gold, individuals on a more limited budget may find silver to be more practical for their needs than gold. Silver has the advantage right now of being cheap relative to gold and to almost all other assets on the planet.

And like gold, silver is historically and constitutionally considered to be money. In a worst-case scenario if the banking system failed, the internet went down, and the fiat monetary system collapsed, silver coins would be far more practical for buying food and other basic necessities than gold coins.

But of course most holders of physical gold and silver aren’t doomsday preppers. Most precious metals buyers are concerned primarily with obtaining a tangible long-term store of value that also has upside potential in the event that things do go from bad to worse.

In other news, there has been lots of action over the past week on the sound money policy front – both positive and negative.

On the negative side, the house revenue committee in Wyoming absolutely gutted the forward-thinking bill recently passed by the Wyoming Senate. The authority for the state to acquire gold was yanked out, as were the provisions permitting certain tax payments to be paid in gold and silver.

Rep. Mark Jennings attempted to save the sound money bill on the House floor with an amendment stipulating the State of Wyoming must, at long last, own at least some gold or silver. This compromise amendment would have ensured that Wyoming took one baby step forward on sound money. Unfortunately, the Jennings amendment failed by a vote of 34-27.

Those Wyoming House members who defeated the Jennings amendment did so because they outright oppose sound money -- and do not mind (or realize) that Wyoming is today a sitting duck, with limited ability to protect itself against the inflation and financial instability caused by central bankers and tax-and-spend politicians in Washington DC.

In recent years, the State of Wyoming has lost hundreds of millions of dollars on investments in emerging market debt – which is a fancy term that actually means loans given to Third World countries. Yet the Cowboy State does not own a single ounce of constitutional, sound money – even as gold has risen 50% since Wyoming legislators first started debating the issue back in 2019.

However, sound bills are moving forward in other states. This week, the Idaho House passed out a bill that would prompt the State Treasurer to hold some physical gold and silver, sending the bill over the Idaho Senate. A similar bill in Tennessee passed a house committee and is now heading to the Tennessee house floor.

Meanwhile, a bill in Iowa removing capital gains taxes from gold and silver received a favorable hearing and is heading for a full house vote. And another bill in Oregon would cancel some discriminatory taxes imposed on precious metals dealers and their customers. And that bill appears to have lots of support as it moves through the Oregon legislature.

All told, there are more than 30 sound money bills pending in 19 states – the most we’ve ever seen! Most of these bills will likely fall short, but the momentum does exist to achieve some important wins this year. Stay tuned.

   

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.

Idaho House Votes to Authorize State Gold & Silver Holdings

Sound Money Defense League

Boise, Idaho (March 2, 2023) -- The Idaho State House today approved a bill to enable the State Treasurer to protect state funds from inflation and other financial risks by holding some physical gold and and silver.

State representatives voted 40-29 to pass House Bill 180, the Idaho Sound Money Reserves Act, sending the measure introduced by Representative Barbara Ehardt (R-Idaho Falls) and Senator Phil Hart (R-Kellogg) to the Senate for a hearing.

Supported by Idahoans and groups such as Sound Money Defense League, HB 180 would permit – but not require – the State Treasurer to hold some portion of state funds in physical gold and silver to help secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in devaluing Federal Reserve Notes.

Speaking on the house floor, Rep. Vito Barbieri (R-Dalton Gardens) said, “We need to give our treasurer the ability to consider doing what so many central banks around the world have been doing, which is acquiring gold. Gold and silver are also right there in our U.S. Constitution."

The Idaho State Treasurer currently has very few options for holding, managing, and investing Idaho’s “idle moneys.” Due to statutory constraints, Idaho’s reserves are invested almost exclusively in low-yielding debt paper that carries counterparty risk while its value is diminished by inflation.

Stefan Gleason, president of Idaho-based Money Metals Exchange, pointed out that the Idaho Treasurer's office is dangerously handcuffed. "Because of Idaho’s outdated 'idle money' statute, state funds are herded into debt paper instruments whose real value is being absolutely slaughtered by inflation right now.”

“That’s because the state reserves are principally invested in low-interest debt paper, e.g., U.S. Treasuries, money market funds, corporate debt, repurchase agreements, and other dollar-denominated debt,” Gleason continued.

Responding to growing concerns about rising government debts and Federal Reserve money printing, Ohio recently followed Texas in acquiring a 5% physical gold holding in its public pension funds. And West Virginia, Mississippi, Maine, Tennessee, Montana, and Missouri are presently considering bills in 2023 with provisions akin to Idaho's HB 180.

Jp Cortez, policy director of the Sound Money Defense League, said “Inflation has impacted every Idaho family.  With inflation rates in the 7% to 9% range. the real annual rate of return for Idaho taxpayers on its $10.4 billion in ‘idle moneys’ is deeply negative.”

The State Treasurer manages several particularly large funds -- the IDLE Pool holds roughly $5.3 billion, the Local Government Investment Pool has $4.1 billion, and the Diversified Bond Fund has $1 billion.

HB 180 adds the authority to hold physical gold and silver directly and in a manner that does not assume the counterparty and default risks involved with other state holdings. HB 180 bill does not grant any authority to buy stocks, futures contracts, or other gold-based proxies or financial instruments. There are at least five depositories in the region that would be eligible to hold Idaho’s gold and/or silver.

"It’s prudent to provide the State Treasurer with options to hedge against the accelerating inflation that’s been foisted upon savers, wage-earners, retirees, and the Gem State itself by short-sighted politicians and central bankers in Washington, DC, said Cortez. "A failure to pass HB 180 could be costly. Inflation is a match that has already set Idaho’s big pile of debt paper ablaze."

House Bill 180 can be heard before the Senate State Affairs Committee as early as next week.

The Sound Money Defense League is a public policy group working nationally to promote sound money policies, including reaffirming the constitutional role of gold and silver as money. It also maintains the authoritative Sound Money Index which tracks and ranks the policies of all 50 states.

Catch-22: Rate Hikes May Fuel Even MORE Inflationary Deficit Spending

By Stefan Gleason, Money Metals News Service

Federal Reserve rate hikes meant to quell inflation may ultimately have the opposite effect.

Of course, higher borrowing costs will force consumers to scale back and businesses to trim payrolls. A contraction in debt-financed economic activity will in theory cause inflation to fall.

However, contrary to popular misconceptions perpetuated by the Fed, the root causes of inflation aren't tied to employment or economic growth. Inflation occurs when the currency supply expands too rapidly as confidence in the ability of U.S. dollars to retain their value falls.

Higher interest rates may well induce a recession that temporarily causes demand for money and credit in the private sector to contract.

Meanwhile, such conditions wouldn't blunt government demand for new currency. Quite the opposite!

During recessions, the government tends to increase spending on "stimulus" programs even as revenues shrink.

Members of Congress, unlike heads of households or CEOs of corporations, don't practice austerity when times are tough or borrowing costs go up. They keep spending and borrowing.

Up until recently, politicians had the luxury of being able to finance their fiscal profligacy at ultra-low rates. But now their deficit spending will carry a massive cost increase in terms of interest owed.

Within just five years, annual interest on the national debt will surpass what the United States spends on national defense. The Congressional Budget Office projects that over the next decade, the federal government will owe more than $10 trillion in interest as the principal itself (now nearly $32 trillion) continues to spiral upward.

Federal finances are trapped in a vicious circle. Uncle Sam needs to keep borrowing just to service existing debt, which creates even larger future interest obligations.

According to the Committee for a Responsible Federal Budget, "For every dollar that the U.S. government will borrow over the next decade, 50 cents will be just to pay interest on our national debt."

Rate hikes represent a Catch-22 for Fed policymakers. If they stop hiking while inflation continues to run above target, they may never be able to get out in front it. But if they keep hiking, they will induce the U.S. Treasury Department to extend its lines of credit – which is inflationary.

Some members of Congress are putting their foot down on deficit spending – or at least making a show of it – and vowing not to raise the statutory debt ceiling without at least some budget concessions from the Biden administration.

Biden officials are refusing calls for spending cuts and eying possible work-arounds to bypass Congress completely.

Among the possibilities, originally floated by Obama administration operatives, would be to have the Treasury Department mint a platinum coin with an arbitrary $1 trillion face value, sell it to the Federal Reserve, and use the cash to pay the government's bills.

"The Trillon Dollar Coin"
By DonkeyHotey - Flickr, CC BY 2.0, Wikipedia

Such a move would not only be a massive administrative power grab; it would also be an inflection point toward a "print on demand" monetary system that does away with the formalities of getting financing through the bond market.

In February, Senator Mike Lee (R-UT) introduced the Cancel the Coin Act to block the Biden administration from attempting to concoct trillions of dollars out of thin air.

According to Lee, "The Cancel the Coin Act removes a legal loophole that allows the Treasury Secretary to bypass the statutory borrowing limit by minting platinum coins of any denomination."

He added, "A modern monetary theory-inspired spending spree would be disastrous for the American economy and the American way of life."

Treasury Secretary Janet Yellen is reluctant to employ a scheme that would signal so bluntly to the world that the United States has embarked on a course of hyperinflation as a way of managing its debt burden.

In reality however, the current system – whereby the Treasury prints bonds, the Fed prints Federal Reserve notes, and the two just swap with each other – is not fundamentally different than the Treasury just printing (or minting) intrinsically worthless money by itself.

However the debt ceiling fight gets resolved politically, there will be no resolution to the underlying debt problem.

Officials may be able to stave off a full-blown financial disaster this time around, but they won't be able to get federal finances off their unsustainable fiscal path.

If a Zimbabwe-style hyperinflation sets in, then platinum may someday be worth $1 trillion (or more) per ounce. While such a scenario cannot be ruled out, the years immediately ahead may be more akin to the late 1970s when rising interest rates and rising inflation gave rise to an epic precious metals bull market in both nominal and real terms.

Platinum – along with gold, silver, and other hard assets – are cheap today relative to the prices they could command in the future as the government accumulates more obligations by the trillions.

 

Stefan Gleason is President of Money Metals Exchange, the company recently named "Best Overall Online Precious Metals Dealer" by Investopedia. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC and in hundreds of publications such as the Wall Street Journal, TheStreet, and Seeking Alpha.

Heterodox Academy (HxA): Another Club for Leftists

Nathan Cofnas, National Association of Scholars:  Four Reasons Why Heterodox Academy Failed

Nathan Cofnas is a Leverhulme Early Career Fellow in the Faculty of Philosophy at the University of Cambridge; nrc48@cam.ac.uk.

The purge of heretical scholars and ideas in academia is intensifying.¹ Many job applications now require loyalty oaths to woke orthodoxy in the form of “diversity statements.”² In the humanities and social sciences, large numbers of faculty are being hired to engage in what is effectively leftist activism.³ Simply ranting about how much you hate conservatives, Christians, or straight white men can be considered “scholarship” and the basis for a distinguished career. Entire departments devoted to ideology-driven fields like gender studies have been established to promote “social justice” and provide sinecures to activists.⁴ Academic papers that undermine the woke narrative are being retracted,⁵ and journals are adopting implicit or explicit polices to ensure that crimethink is never published again.⁶ Many undergraduate and graduate programs have stopped asking for standardized test scores and are increasingly making admissions decisions based on race, gender, sexual orientation, and ideological conformity.

Seven years ago, Heterodox Academy (HxA) came on the scene to promote “ideological diversity” in academia. Cofounder Jonathan Haidt—a prominent social psychologist who is now chair of the board of directors and the person most associated with the organization—spoke forcefully about the scholarship-corrupting effects of liberal groupthink. The leaders of HxA led people to believe that they were going to organize a meaningful resistance.

Seven years later, you can count HxA’s accomplishments in promoting heterodoxy on the fingers of zero hands. It has focused mainly on aggrandizing celebrity academics who hold conventional leftist views, and giving a platform to liberals to engage in empty virtue signaling about their alleged commitment to free inquiry. Scholars whose work is genuinely heterodox have been systematically marginalized. In at least one instance, a psychologist known for his work on race differences (Helmuth Nyborg) was denied membership.

Read the rest here.

This Week's Favorites...

...From Power Line:

On Trump Calling Out Victoria Nuland

🔥 David Sacks on Trump Calling Out Victoria Nuland by Name in His Latest Speech

"Nuland is the Fauci of this situation. The same way that Fauci was supposed to be protecting us from viruses and then funded gain-of-function research. Victoria Nuland was supposed to be our chief… https://t.co/ijhU5lh3tk pic.twitter.com/IeyOemJmOv

— Chief Nerd (@TheChiefNerd) February 24, 2023

Mississippi Legislature Votes Overwhelmingly to End Sales Taxes on Gold and Silver

Jp Cortez, Sound Money Defense League

(Jackson, Mississippi) – State lawmakers of both houses have just voted overwhelmingly to exempt physical gold, silver, platinum, and palladium coins and bullion from the Mississippi state sales tax, sending the bill to Governor Tate Reeves (R) for his signature.

Senate Bill 2019, sponsored by Sen. Chad McMahan (R – 6), passed yesterday out of the full senate by a vote of 47-2. This afternoon, Rep. Jody Steverson’s identical House Bill 1661 passed out of the full house chamber on an overwhelming voice vote.

Backed by the Sound Money Defense League, Money Metals Exchange, and in-state Mississippi dealers and investors, the legislative effort built upon last year's momentum. In 2022, a similar sales tax exemption bill had passed out of the Mississippi House of Representatives overwhelmingly but it missed a deadline in the Senate needed to receive a hearing.

If Gov. Reeves signs the bill next week (or if he simply chooses not to veto it), Mississippi will become the 43^rd state to exempt sales of sound money from state sales tax. The effective date is July 1, 2023.

Every one of Mississippi’s neighbors (Alabama, Louisiana, Kentucky, and Tennessee) have already stopped taxing the monetary metals. Most recently, Tennessee ended this tax in 2022, and Arkansas and Ohio eliminated this tax in 2021.

Under the status quo in Mississippi, citizens are discouraged from protecting their savings against the devaluation of the dollar because they are penalized with sales taxation for doing so.

Eliminating sales taxes on gold and silver is good public policy for several reasons:

• Levying sales taxes on precious metals is inappropriate. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is "consuming" the good. Precious metals are inherently held for resale, not "consumption," making the application of sales taxes on precious metals inappropriate.

• Studies have shown that taxing precious metals is an inefficient form of revenue collection. The results of one study involving Michigan show that any sales tax proceeds a state collects on precious metals are likely surpassed by the state revenue lost from conventions, businesses, and economic activity that are driven out of the state.

• Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business to neighboring states, such as Alabama or Louisiana (which have eliminated or reduced sales tax on precious metals), thereby undermining Mississippi jobs. Levying sales tax on precious metals harms in-state businesses who will lose business to out-of-state precious metals dealers. Investors can easily avoid paying $136.50 in sales taxes, for example, on a $1,950 purchase of a one-ounce gold bar.

• Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Mississippi does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments. 

• Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren't fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us, including pensioners, Mississippians on fixed incomes, wage earners, savers, and more. 

The trend across the nation is to eliminate taxes on precious metals. The state of Louisiana and Ohio both experimented briefly with reimposing sales taxes on precious metals purchases. They both quickly reversed course (within two years) and reinstated their sales tax exemptions on precious metals -- because businesses, coin conventions, and state tax revenues were leaving the state.

After the two identical Mississippi bills are transmitted from their respective chambers, Governor Tate Reeves must sign or veto the legislation within 5 days after transmittal (excluding Sunday), or it becomes law without his signature.

In 2023, bills to restore sound, constitutional money have also been introduced in Alaska, Iowa, West Virginia, South Carolina, Missouri, Minnesota, Tennessee, Montana, Idaho, Wyoming,  Kansas, and more.

Currently Mississippi is tied for 45^th out of 50 in the 2023 Sound Money Index. Passage of these measures would increase the state’s ranking dramatically.

Jp Cortez is the Policy Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level and publisher of the Sound Money Index.

Biden Pushing the U.S. into the Great Reset

Kevin Stocklin, The Epoch Times:  Biden Admin Negotiates Deal to Give WHO Authority Over US Pandemic Policies

The Biden administration is preparing to sign up the United States to a “legally binding” accord with the World Health Organization (WHO) that would give this Geneva-based UN subsidiary the authority to dictate America’s policies during a pandemic.

[...]

“They want to see a centralized, vaccine-and-medication-based response, and a very restrictive response in terms of controlling populations,” David Bell, a public health physician and former WHO staffer specializing in epidemic policy, told The Epoch Times. “They get to decide what is a health emergency, and they are putting in place a surveillance mechanism that will ensure that there are potential emergencies to declare.”

The WHO pandemic treaty is part of a two-track effort, coinciding with an initiative by the World Health Assembly (WHA) to create new global pandemic regulations that would also supersede the laws of member states. 

[...]

Physician Meryl Nass told The Epoch Times: “If these rules go through as currently drafted, I, as a doctor, will be told what I am allowed to give a patient and what I am prohibited from giving a patient whenever the WHO declares a public health emergency. So they can tell you you’re getting remdesivir, but you can’t have hydroxychloroquine or ivermectin. What they’re also saying is they believe in equity, which means everybody in the world gets vaccinated, whether or not you need it, whether or not you’re already immune.”

Read the rest here.

We're Winning

This is gold!! 🙌 @TruthSeek01011 pic.twitter.com/dOSTITTiy6

— Suzy🇨🇦 (@Susiemagooziee) February 16, 2023

Iowa Seeks to End Capital Gains Taxes on Gold and Silver

Jp Cortez, Money Metals News Service

(Des Moines, Iowa) – With inflation raging across America, an Iowa lawmaker seeks to end one of the strongest disincentives to owning and using gold and silver: capital gains taxes.

A tax-neutral bill introduced by Rep. Jeff Shipley (R – Van Buren), House File 208 would prompt Iowa taxpayers to remove from their reported state income all gains (or losses) tied to sales of gold and silver.

Iowa rightfully exempted the monetary metals from state sales taxes years ago. Removing income tax from the precious metals is the logical next step.  By passing this bill, Iowa would join several other states in ending income taxation of the only form of money mentioned in U.S. Constitution.

According to Rep. Shipley, "Inflation is destroying the wealth and earnings of Iowa families, and people are looking for places to save their wealth without being hammered by taxes. Gold and silver are the only money mentioned in the U.S. Constitution and Iowa shouldn't be taxing these metals."

Wyoming, Arizona, Utah have already passed bills similar to HF 208. South Carolina, West Virginia, Missouri, and Idaho are considering such measures right now.

Several decades ago, monetary gold and silver -- and dollars formally redeemable in gold and silver -- were supplanted by the Federal Reserve note as America’s currency. However, an increasing number of Iowa citizens are realizing that holding gold and/or silver as a form of savings can help protect against the ongoing devaluation of the Federal Reserve note.

Here are a few reasons why House File 208 is good public policy:

• Current Iowa law assesses taxes on imaginary gains. Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.

            Yet this nominal gain is taxed at the federal level – and, because Iowa uses federal adjusted gross income (AGI) as a starting point for Iowa income calculations, this nominal gain is taxed again by the Hawkeye State.

• Inflation harms the poorest among us. Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets.

• Taxing imaginary gains is harmful to citizens attempting to protect their assets. Investments in precious metals coins and bullion are rightly exempt from Iowa’s sales tax. Neutralizing Iowa’s income tax treatment of the monetary metals would remove the last major disincentive in Iowa that stands against the ownership and use of the monetary metals.

Policies that penalize savers in precious metals reduce the likelihood that Iowa citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by Congress and the Federal Reserve.

Iowa is currently ranked 18^th on the Sound Money Index. If HF 208 becomes law, the Hawkeye State would be competing for a top spot against states like Wyoming, South Dakota, and Alaska, the three states currently atop the index.

Last week, the Wyoming Senate and the Missouri Senate both became the first states in 2023 to pass sound money legislation out of a full legislative chamber.

More than a dozen states have introduced pro-sound money legislation in 2023 so far, including Alaska, Minnesota, Mississippi, Oklahoma, Tennessee, Oregon, West Virginia, Wisconsin, Kentucky, Florida, and more.

 

Jp Cortez is a graduate of Auburn University and a resident of Charlotte, North Carolina. He is the Policy Director of the Sound Money Defense League, an organization working to bring back gold and silver as America's constitutional money. Follow him on Twitter @JpCortez27