North Carolina House Republicans want the state to use some of its savings to buy gold bullion and bury it in Texas.
A group of House Republicans filed a bill in mid-April that would have the state use $2 billion from its savings reserve to buy gold bullion. The bill sat idle in the House Appropriations Committee until Thursday, when it was sent to the Committee on State Government. It’s set for a committee hearing Wednesday.
Rep. Mark Brody, the bill’s lead sponsor, said in an email last week that the value of the gold proposed for purchase will be lowered to $400 million to $500 million in a revised bill. House bill 721 proposes to store North Carolina’s gold in a bullion depository the state of Texas created in 2015. Deposits were stored in Austin until a new facility opened outside the city in 2020.
Dissatisfaction with the Federal Reserve is at the heart of the North Carolina bill.
“The reason – the federal government is consistently and increasingly devaluing our currency,” Brody said in his email. “To begin to set aside an amount of physical gold over a number of years will put NC in a better financial position should the devaluing process turn into hyperinflation.”
Under the bill, North Carolina’s gold would be stored in Texas while the state Treasurer studies the cost and benefits of establishing a North Carolina-administered bullion depository. The gold would be moved from Texas if North Carolina establishes its own vault or if it needs to be sold to help North Carolina pay its bills.
Rep. Wesley Harris, a Charlotte Democrat with a doctorate in economics, said gold is as safe as any other asset, and it can rise and fall in value. “It’s not like protecting North Carolina from risk,” he said.
The U.S. dollar, like most other paper currency in the world, is fiat currency that is backed by the government that issued it rather than a commodity like gold or silver.
President Richard Nixon in 1971 officially ended the gold standard, breaking the link between the dollar and gold.
The United States has the most stable monetary system in the world, Harris said.
“The Federal Reserve isn’t running amok,” said Harris, who announced his candidacy for state Treasurer. “There’s no reason to take our money and put it in a less liquid asset.”
National groups are pushing a return to the gold standard.
The Sound Money Defense League encourages investments in gold. Its slogan is “Bringing gold and silver back as America’s Constitutional money.”
The Tenth Amendment Center encourages states to follow Texas in establishing their own bullion depositories and wants people to be able to use gold and silver for routine purchases.