by Peter Schiff, Schiff Gold:
This March, Republican primary voters in Texas won’t just be choosing which candidates to represent their party in November – they will also be voting on a series of ballot propositions that while not legally binding offer a way for voters to guide their leaders.
Here’s why what is happening in Texas matters and what it says about the future of gold.
Among the ballot propositions is one for the Texas government to have the Texas State Comptroller’s office start a program to “administer access to gold and silver through the Texas Bullion Depository for use as legal tender.” Texas already has a state-run depository for precious metals that began operations in 2018.
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It’s probably not a surprise that after years of harsh inflation Texas voters would be sympathetic to the use of precious metals as legal tender. Texas isn’t alone in taking steps towards gold as legal tender. As reported earlier by SchiffGold’s Michael Maharrey, lawmakers in Florida and Oklahoma have introduced bills into their respective state legislatures that would follow Texas by creating their own state-run depositories.
What’s happening in Texas matters and has an impact on the future of gold.
Politically, Texas is not just the second most populous state it’s also the most populous red state. Unlike Vegas, things that start in Texas tend not to stay there. Texas, like Florida, introduces policies that tend to spread nationwide. Texas was the first state to introduce state-run depositories and it looks like other states may be following in the near future. Plus, the pro-gold movement in Texas isn’t being pushed by a particular politician who will eventually retire or voted out of office, it’s being driven by grassroots political demand of Texas Republican voters. And since the Republican Party controls the Texas government, successful ballot propositions from Republican voters often become law.
Will this ballot proposition succeed in the GOP primary? If history is any guide, then yes. In 2022, Texas GOP primary voters voted on ten ballot propositions, and all ten of them passed. And while politicians may not always listen to voters and the government can sometimes move slowly, some of these propositions have already been turned into Texas law on areas ranging from transgender issues to teaching of critical race theory in public schools. This proposition would send a strong signal to Republican politicians in Texas- and across the country. Ambitious politicians seeking to appeal to Republicans, independents, and all voters who are concerned about inflation and seeking a stable store of value will know that there are votes to be won by backing pro-gold policies.
This ballot proposition is also important because it shows the underlying stable grassroots demand for the use of gold as an investment, but also as currency. When the government or Wall Street or Silicon Valley billionaires push a new financial product there’s often special interests or unsavory connections lurking in the background. For example, the SEC’s Gary Gensler who seems poised to back crypto ETF’s has close ties to the family of Caroline Ellison, the crypto CEO and SBF ex-girlfriend who pled guilty of fraud. And of course the securities and investment industry spends hugely on influencing the federal government.
But gold has retained its central place and enduring value without legions of high-paid lobbyists or paid-off policy makers. But still demand from consumers, investors, and governments around the world means gold is still too important to ignore. That’s why pro-gold initiatives like eliminating the capital gains tax on the sale of gold and silver keep cropping up in states around the nation. As long as America is a republic, it seems likely that voters will always favor the stability of gold over endless years of inflation that eat away at the dollar.
