Senate Committee Kills the Idaho Gold Bill:
Bad Decisions Rule over Reason
On February 20, 2018, five fallacious arguments were used by the Idaho Senate Committee on Local Government and Taxation to kill the Idaho gold bill H449. They were as follows:
- Gold and silver do not fluctuate based on inflation (Senator Jim Rice) and this bill will not provide a true offset to inflation (Senator Jim Patrick).
This argument may be true in the short run, but over time, for thousands of years, gold and silver have proved to be the best and only true hedge against inflation. One ounce buys the same number of goods and services as it did 20 years, 200 years, or 2000 years ago. One grain of gold could buy a gallon of gas when I was a child. Today that same grain of gold can still buy a gallon of gas. In terms of pricing, the value of gas has not gone up; it is the purchasing value of the US Dollar (USD) that has gone down due to excess money creation. The same applies to real estate, food, and other necessary products purchased by average citizens. The two Senators are falsifying history.
- Gold is simply another commodity, like salt (Senator Jim Rice).
This argument is absurd because if gold is not money, why are central banks holding the majority of their reserves in gold bullion? Central banks around the world do not store salt in their vaults, only in their lunch rooms. In February 2018, according to the World Gold Council, the central banks held 33,800 tons of gold in their vaults. Alone, the USA has over 8,133 tons of gold, which is held on their books as a reserve monetary asset. Gold represents 68% of world central bank reserves. Gold never wears out; yet, 17.9% of every ounce of gold ever mined in the history of the world is currently stored in central bank vaults and the IMF. In addition, many of the central banks are aggressively adding to their central bank gold reserves. Gold is not just a commodity; it mandated by the U.S. Constitution as constitutional money in the USA. It is the only monetary asset that has successfully persisted as money throughout the history of the world.
- The taxation of gold and silver should be decided by the judicial branch (Senator Grant Burgoyne).
The Senator is circumventing his sworn duty to enforce and defend the US and Idaho Constitutions. It is not up to the courts to legislate what is clearly spelled out in Article 1, Section 10 of the U.S. Constitution. The Senator needs to pick up the Constitution, read it, and act accordingly. Utah, Arizona, and Wyoming have passed gold bills similar to the Idaho gold bill killed by this Senate committee, because their legislators understood their responsibility to defend and uphold the Constitution.
- The bill includes bullion which has never been used as currency (Senator Jim Rice).
This non-argument exhibits a lack of understanding of banking and of monetized bullion. Of course, the people do not use bullion to buy gas and food, but bullion is used to transfer large sums of money between banks to settle accounts. Bullion is the preferred method to settle accounts for large transactions, especially international transactions, and always has been. Bank gold deposits are classified as reserve assets; specifically, monetary assets. Gold bullion is counted with other monetary assets such as, USDs, Special Drawing Rights (SDRs), and foreign currencies. To deny gold’s usage in monetary history is astounding. The UK transferred a shipload of gold bullion to the USA during WWII to buy weapons to defend their country; they did not send British Pound Sterling or USDs. President Richard Nixon closed the gold window, because France and other countries wanted to convert their USDs into gold, when the USD was convertible to gold. The Senator is falsifying history (again), when he claims that bullion has never been used as currency.
- In practice, gold and silver are not treated or used like currency in routine transactions (Senator Jim Patrick).
In the first 31 years of my life, and for most of the USA’s history, gold and silver coins were treated and used like currency in routine transactions. Many of those coins are still in circulation as collectables, because they are worth more than their face value. Up until 1965 silver was used extensively to mint U.S. coins and were treated and used like currency. When I was a young boy, I could go the movies or buy a gallon of gas for my Evinrude; each transaction cost one silver dime. The executive order by President Nixon in 1971 put an end to precious metals in routine transactions, but this order was supposed to be a temporary. Forty-seven years have now passed. It is time to suspend the temporary order and return to gold and silver, as Richard Nixon, John Connally, Arthur Burns, and Paul Volker intended.
The final vote was 6 to 3 to kill the bill. The Republican Senators, who voted to kill this bill were Senator Dan Johnson (Chair), Senator Jim Rice, Senator Jim Patrick, and Senator Jeff Siddoway. They were joined by the two Democrats, Senator Grant Burgoyne and Senator Mark Nye.
And thank you to the House sponsor, Representative Mike Moyle, and all those in the House of Representatives who voted overwhelmingly to move this bill forward to the Senate.
I look forward to the two sponsors and the bill’s workhorse, Stefan Gleason, President of Money Metals Exchange, to try again next year. Let’s vote to unite Idaho with Arizona, Utah, and Wyoming as a sound constitutional money freedom zone stretching from Mexico to Canada.
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