Jp Cortez on De-Dollarization and the Growing Appeal of Gold as Sound Money

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As a seasoned crypto investor with a keen interest in the monetary system and its evolution, I find the work of the Sound Money Defense League both intriguing and inspiring. Having lived through multiple economic crises and witnessed the devaluation of fiat currencies, I can’t help but admire their relentless pursuit of a stable, sound money system.

Recently, I had the opportunity to delve into the burgeoning support for the sound money movement in the United States during an interview with Kitco News. As a financial analyst, this topic holds significant interest for me as it represents a shift towards more stable and reliable forms of currency within our economy.

The Sound Money Defense League is a U.S.-based non-profit organization that champions the use of what’s called “sound money,” predominantly advocating for gold and silver to be recognized as legal tender. They argue that these metals possess a consistent, inherent worth, unlike paper currencies, which can suffer from inflation and government or central bank manipulation. The league favors policies that decrease governmental influence over money and encourages the integration of gold and silver within the monetary system.

One important goal of the Sound Money Defense League is to simplify legal and financial obstacles so people can easily use gold and silver as a form of money. This involves supporting policies that exempt transactions involving precious metals from taxes, such as those related to their purchase, sale, or exchange. They believe that taxing these metals disproportionately affects individuals who store their wealth in them, particularly during times when inflation reduces the worth of paper currency.

Beyond political actions, the Sound Money Defense League focuses on instructing both the general public and decision-makers about the significance of sound money principles. They underscore that gold and silver have traditionally offered economic stability and lasting worth, and they express concerns over contemporary monetary systems due to their susceptibility to inflation and financial turmoil.

The organization additionally advocates for legislation at the state level, championing laws that accept gold and silver as valid currency in additional U.S. states. They work alongside financial specialists and liberty-focused groups to further their objectives. By doing so, the Sound Money Defense League aims to reestablish a monetary system they believe can safeguard individual wealth from the risks of inflationary measures.

Moreover, this collective also releases the Sound Money Index, a tool that evaluates U.S. states based on their policies’ alignment with sound monetary principles. This index serves to identify those states with legislation and tax structures that promote the usage of gold and silver. The intention is to inspire other states to follow suit by adopting similar sound money practices.

Cortez explained that sound money, which maintains its worth throughout the years and is usually tied to tangible assets such as gold and silver, contrasts with fiat money – not backed by physical goods. Fiat money can be affected by inflation and governments manipulating it. In Cortez’s view, sound money acts as a safeguard against the unpredictability of fiat currency, offering long-term financial stability. He underscored that precious metals like gold and silver have served as dependable forms of money for millennia and are essential in protecting personal wealth.

The discussion shifted towards the achievements in legislation during 2024. Cortez emphasized notable triumphs, including the abolition of sales taxes on precious metals in states like New Jersey and Nebraska. These changes signify a crucial advancement as gold and silver are now seen more as currency than taxable commodities. In Nebraska, Cortez and the Sound Money Defense League swiftly rallied when legislators aimed to reimpose taxes on precious metals. Community activism thwarted the plan, which followed closely after Nebraska passed a law exempting precious metals from capital gains tax and upholding gold and silver as money while barring Central Bank Digital Currencies (CBDCs). Cortez also praised New Jersey for being the 45th state to scrap taxes on gold and silver, albeit with an exception for transactions below $1,000, a rule he felt unfairly disadvantages small investors.

Cortez highlighted the significant impact of community activism in achieving these legislative triumphs. He pointed out that while drafting bills and expert testimony are crucial components, success frequently depends on ordinary citizens persuading lawmakers through their pressure. The Sound Money Defense League has demonstrated this approach’s effectiveness by successfully thwarting anti-sound money proposals and propelling reforms at the state level using this strategy.

Cortez shifted the conversation towards the growing trend of phasing out the use of the US dollar and the role that gold plays as a buffer in situations where fiat currencies become unstable. He highlighted the rising popularity of gold among central banks and individual investors, pointing out that its price has soared to around $2,600 per ounce currently. Cortez suggested that many nations, particularly those belonging to BRICS, are shifting away from relying on the US dollar due to long-term U.S. monetary policies. He underlined the perception of gold as a dependable substitute for fiat currencies in times of high inflation and potential future price hikes. States like Utah are pioneering this trend by contemplating the storage of physical gold in their reserves, which Cortez referred to as an essential safeguard against the volatility of the US dollar.

Cortez was forthright about the potential future of the U.S. dollar. He likened its gradual weakening to a “death by a thousand small wounds,” attributing this to long-term monetary mismanagement and the use of the dollar as a weapon in global disputes. He posits that the dollar’s position as the world’s primary reserve currency could be jeopardized, given the rise of countries like China and Russia trading more in gold. Although he admitted that an immediate collapse of the dollar is unlikely, Cortez contends that the move towards alternatives, particularly gold, is already gathering momentum.

Although advancements have been made at the state level, Cortez voiced discontent over the absence of federal reforms concerning sound money. He highlighted Congressman Alex Mooney’s persistent attempts to submit legislation aimed at abolishing the federal capital gains tax on precious metals and scrutinizing U.S. gold reserves. While Cortez commended Mooney for keeping the discussion ongoing, he remained pessimistic about significant federal progress in the immediate future. However, Cortez emphasized that if Mooney’s endeavors to eliminate federal capital gains taxes on gold and silver prove successful, it could spark a chain reaction among the states, as many states still imposing these taxes do so due to the federal government’s example.

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2024-09-26 18:57