Economics/Class Relations

Wyoming Legislators Want State to De-Risk Investments by Holding Gold and Silver

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By J.P. Cortez

Cheyenne, Wyoming (January 17, 2019) – A group of Wyoming legislators have introduced three bills this week to de-risk the state’s financial holdings with modest allocations to physical gold and silver in the state’s pension fund, reserve fund, and mineral trust fund.

Introduced by Representative Roy Edwards (R-Gillette) and co-sponsored by 15 others, the Wyoming Sound Money Trust Act (HB 174) empowers the State Treasurer to hold at least 10% of the Permanent Wyoming Mineral Trust Fund in the monetary metals in a depository in or near the state of Wyoming.

The Permanent Wyoming Mineral Trust Fund is the state’s oldest and most well-funded permanent fund with over $8 billion in assets.

Last year, Rep. Edwards successfully passed the ground-breaking Wyoming Legal Tender Act, a measure which reaffirmed that gold and silver are constitutional money and removed all state taxation of them.

Meanwhile, the Wyoming Sound Money Pension Act (HB 156), introduced by Representative Mark Jennings (R-Sheridan), aims to reduce financial risk and better secure state-managed pension funds by allocating a modest 10% of Wyoming Pension System assets to the monetary metals.

And Representative Scott Clem (R-Campbell) introduced the third bill, the Wyoming Sound Money Reserve Act (HB 190). This measure requires that at least 10% of Wyoming’s Legislative Stabilization Reserve Account be held in gold and silver.

All of these measures would help the state hedge its risks of holding stocks, bonds, and short-term debt instrument with an allocation to a bedrock asset carrying no counterparty risk and proven to maintain purchasing power. The state has suffered significant investment losses in recent months, including a $220 million unrealized loss on investments in Third World debt.

Backed by the Sound Money Defense League and Campaign for Liberty, these measures protect Wyoming’s accounts by insulating them with the only money proven to protect against the Federal Reserve Note’s ongoing devaluation. Furthermore, an allocation to precious metals is proven to increase overall returns over time, reduce volatility, and reduce drawdowns.

The Sound Money Defense League is a public policy group working nationally to bring back gold and silver as America’s constitutional money and publisher of the Sound Money Index. For comment or more information, call 1-208-577-2225 or email jp.cortez@soundmoneydefense.org.

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  1. Gold and silver aren’t always stable sources of value. Most people today won’t remember about 1979 or so, when Bunker Hunt attempted to corner the silver market, with disastrous consequences for him and others. https://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
    From that article:
    “Silver manipulation
    Main article: Silver Thursday
    Beginning in the early 1970s, Hunt and his brothers William Herbert and Lamar began accumulating large amounts of silver. By 1979, they had nearly cornered the global market.[9] In the last nine months of 1979, the brothers profited by an estimated $2 billion to $4 billion in silver speculation, with estimated silver holdings of 100 million troy ounces (3,100,000 kg).[10]

    Primarily because of the Hunt brothers’ accumulation of the precious metal, prices of silver futures contracts and silver bullion rose from $11 an ounce in September 1979 to $50 an ounce in January 1980. Silver prices ultimately collapsed to below $11 an ounce two months later.[11] The largest single day drop in the price of silver occurred on “Silver Thursday.”[2] In February 1985 the Hunt brothers were charged “with manipulating and attempting to manipulate the prices of silver futures contracts and silver bullion during 1979 and 1980” by the United States Commodity Futures Trading Commission.[2]

    In September 1988 the Hunt brothers filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code largely due to lawsuits incurred as a result of their silver speculation.[2]

    In 1989, in a settlement with the CFTC, Nelson Bunker Hunt was fined US$10 million and banned from trading in the commodity markets as a result of civil charges of conspiring to manipulate the silver market.[2] This fine was in addition to a multimillion-dollar settlement to pay back taxes, fines and interest to the Internal Revenue Service for the same period. His brother[which?] made a similar settlement.[2]

    [end of long quote]

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