Big sound money wins in Arkansas and Mississippi as gold holds firm
By Mike Gleason
As gold bulls defend the key $2,000 level, sound money proponents are scoring big wins in state legislatures.
Arkansas governor Sarah Huckabee Sanders recently signed the Arkansas Legal Tender Act into law. It reaffirms gold and silver as legal tender, as well as ends all taxes on purchase, sale, or exchange of specie.
Specie is defined as "Coin having gold or silver content; or refined gold or silver bullion that is coined, stamped, or imprinted with its weight and purity; and valued primarily based on its metal content not its form."
With strong support from the Sound Money Defense League, Money Metals Exchange, and grassroots activists, Arkansas becomes the 11th state to end capital gains taxes on sales of gold and silver.
If taxpayers own gold or silver to protect themselves against the devaluation of America's paper currency, they frequently end up with a nominal gain when exchanging those metals back into dollars.
Of course, gains that are a reflection of the steady devaluation of the Federal Reserve note dollar aren't necessarily real purchasing power gains. Gold may retain a constant value in real terms, as it tends to do over time, and yet trigger state income tax liabilities in some states.
That is a huge impediment to more widespread adoption of precious metals as currency. States such as Arkansas that allow gold and silver to compete with the U.S. dollar on an even playing field with no discriminatory taxation will help enable their citizens to protect themselves from fiat currency depreciation.
And as Gardner Goldsmith of MRCTV notes, recognizing gold and silver as legal tender, free from taxation, may also help citizens protect their financial privacy:
In other development on the sound money front, Mississippi has become the 43rd state to abolish sales taxes on precious metals thanks also to efforts by the Sound Money Defense League, Money Metals Exchange, and thousands of our customers in Mississippi who repeatedly contacted the legislature.
Last Wednesday, Governor Tate Reeves signed legislation that had unanimously passed out of the state Senate -- ending sales taxes on the purchase of gold, silver, platinum, and palladium coins and bullion in the Magnolia State.
Only seven states still tax purchases of constitutional sound money. Of these outliers, legislative allies in five states have introduced sales tax exemption bills this year.
Sound money policies are clearly gaining momentum. And in recent weeks, so have precious metals spot prices. We here at Money Metals are immensely proud to be leading this national battle to promote sound money policies. The grassroots involvement of our customers in so many of these state battles is really making a difference.
Gold has been flirting with new all-time highs. Not surprisingly, though, it faces some stiff resistance in futures markets with short sellers trying to avert a major breakout.
Bulls, meanwhile, are trying to hold the line at $2,000 per ounce and set up another breakout attempt to push prices into uncharted territory above the $2,100 level.
Metals markets have the potential to react in a big way to any further deterioration in the U.S. dollar.
The U.S. Dollar Index, which is a measure of the Federal Reserve note's relative value against a basket of foreign currencies, sunk to a 1-year low earlier this month. But that tells only part of the story of the dollar's decline.
It continues to lose purchasing power at an elevated pace despite official inflation readings coming in softer in recent months. And it continues to lose status on the world stage as a reserve currency.
The dollar's share of global reserves is sliding so rapidly that even Treasury Secretary Janet Yellen has been forced to admit that the U.S. risks losing global influence to its adversaries. Sanctions on Russia sped up the de-dollarization process last year as Russian trading partners and other countries in U.S. crosshairs sought alternatives including rubles, Chinese yuan, and gold.
The U.S. dollar still represents about 58% of total official reserves around the world. But that's down from 73% in 2001.
Meanwhile, central banks around the world have been stocking up on gold – the most enduring and most universally recognized form of money known to man.
The next leg of the dollar's decline could see a broader move into gold among the general public. Demand for bullion has been impressive so far in 2023. But the real fireworks could begin once gold pushes to new record highs and brings in a whole new spate of skeptics and momentum buyers off the sidelines.
Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 50,000 customers. 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.