Idaho House Votes to Authorize State Gold & Silver Holdings

Idaho House Votes to Authorize State Gold & Silver Holdings

 

By JP Cortez 

 

March 2nd, 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 “Because of Idaho’s outdated ‘idle money’ statute, state funds are herded into debt paper instruments whose real value is being absolutely slaughtered by inflation right now.”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.

 

JP Cortez
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. Cortez is also the lead author of the Sound Money Index. Follow him on Twitter @JpCortez27

 

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.

 

From soundmoneydefense.org

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