Banking
Sound Money Legislation Rapidly Gaining Traction in Many US States
May
by Ronan Manly, BullionStar:
As the US Federal Government and Federal Reserve head ever more into the abyss of destroying the value of the US dollar, continually breaching debt ceilings, creating asset bubbles, and intervening in and manipulating financial markets, there is an accelerating counter force emerging in the US that is the antithesis of this Federal Government and Federal Reserve madness.
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That is the Sound Money movement in the US. Generally speaking, a sound money is a money that is able to maintain a stable purchasing power over time and does not significantly fluctuate due to inflation or deflation. Sound Money is most often associated with a tangible asset, such as gold, which has a low supply increase (or tight monetary controls) to ensure its stability. To paraphrase Mises, a sound money can “protect against arbitrary actions by sovereigns to depreciate the currency.”
The Sound Money Defense League defines sound money as follows:
“Sound money is money that is not prone to sudden appreciation or depreciation in purchasing power over the long term, aided by self-correcting mechanisms inherent in a free-market system.”
The movement for Sound Money in the United States is most powerful and effective on the State level, and its a movement which is grounded in grass roots activism and in the tireless advocacy and promotional work of groups such as the aforementioned Sound Money Defense League, the Tenth Amendment Center, and Campaign for Liberty.
In fact, there are a whole host of US groups and institutes which are on the side of Sound Money, groups which the US mainstream financial media most often conveniently forgets.
While some of these groups focus exclusively or primarily on sound money, such as the Sound Money Defense League, others have remits that span limited government, economic freedom, and individual liberty, as well as sound money. These include the Heritage Foundation, the Mises Institute, the CATO Institute, and the American Institute for Economic Research.
This article has been prompted by the fact that there have been many state level developments and wins in the US recently on the side of sound money, and so much news flow that is seems like practically every week now there are new developments to report about US States advancing or enacting legislation to abolish sales taxes on gold and silver, or to make gold and silver legal tender.
Admittedly with 50 US States, that’s a lot of States to keep track of, let alone remember each State’s sound money initiatives. Luckily there are people like Stefan Gleason (director) and JP Cortez (policy director) of the North Carolina based Sound Money Defense League to keep track of all the news flow. In fact, Gleason and Cortez have been instrumental in actually crafting a significant share of these sound money initiatives and also liaising with and advising the State level legislatures on sound money policies and their implementation.
Another great source of information on US sound money initiatives is the Tenther Blog from the California based Tenth Amendment Center and its authors such as Mike Maharrey, Michael Boldin and TJ Martinell.
Within each of the 50 States, there are about 6 broad areas where States can implement sound money legislation and other sound money initiatives which support the use of physical gold and silver.
These areas are:
• State Sales Tax Laws on precious metals
• State Income and Capital Gains Laws (as they apply to precious metals)
• Gold and Silver Money Status – State Legal Tender status
• State level Precious Metals Depository Laws
• State Reserves Laws on holding precious metals reserves
• State Government Pension Funds attitudes to holding precious metals
Multiply 6 broad policy areas by 50 States and you immediately get a lot of potential news. In fact there are more than 6 policy areas, but this is just keeping it high level.
The Sound Money Index created by the Sound Money Defense League captures all of the above variables and more, and ranks each US State in terms of these variables. In fact, the Sound Money Index uses 12 metrics to calculate which US States are the most pro-sound money States. The Sound Money index rankings can be seen here.
The 5 highest ranking states in the Sound Money Index (those with the most por-sound money policies) are as follows (in order of 1 to 5): Wyoming (56% score), South Dakota (50%), Alaska (50%), New Hampshire (50%), Texas (49%). Technically, South Dakota, Alaska, and New Hampshire are all in joint second place and Texas is in 3rd place.
The next 5 highest ranking States in the Sound Money Index (in order of 6 – 10) are Utah, Arizona, Nevada, Tennessee, and Florida.
The bottom 5 States in the Sound Money Index (in order of 46 to 50) are as follows: California, Minnesota, Maine, New Jersey and Vermont. Its striking that California, home to so many gold dealers, ranks so lowly in the Sound Money Index.
One variable on which nearly all US States score highly is lack of state sales tax on gold, silver, platinum and palladium. In fact, just last week on April 20, 2023 Mississippi became the 43rd US State to scrap sales tax on gold, silver, platinum and palladium “coins currency and bullion [bars, ingots]”.
That followed similar legislation scrapping sales tax on precious metals in Alabama, Ohio, Arkansas, Tennessee, and Virginia over the last two years.