Gold experts note that the state law gives Tennessee the ability to "achieve more financial independence with gold and silver reserves" and could prevent the state from feeling the negative effects of "the Federal Reserve's monopoly on money." (Related: Central banks continue to stockpile gold as recession looms.)
The bill, introduced in the Tennessee General Assembly by Republican senators and representatives, does not actually create a state reserve as a new, independent financial institution. Instead, it authorizes the state treasurer to "purchase and sell gold or precious metal bullion or specie that will be directly owned by the state." A separate bill that would create a state-owned gold bullion depository is still making its way through the legislature and isn't expected to make progress until the 2024 session.
The bills – House Bill 1479 and Senate Bill 529 – define precious metal bullion as "metals that are formed into uniform shapes and quantities such as ingots, bars or plates, with uniform content and purity, as are suitable for or customarily used in the purchase, sale, storage, transfer and delivery of bulk or wholesale transactions in precious metals."
The two bills define specie as "a precious metal stamped into coins or uniform shape, size, design, content and purity, suitable for or customarily used as currency, as a medium of exchange, or as the medium for purchase, sale, storage, transfer or delivery of precious metals in retail or wholesale transactions."
The two bills received widespread bipartisan support. Every single Democrat and Republican in the state House of Representatives and Senate voted in favor of both bills.
Michael Maharrey, writing for Schiff Gold, noted how Tennessee holding its own gold and silver reserves will allow the state "to shield its assets and hedge against rapidly depreciating Federal Reserve notes."
Maharrey further pointed out how Tennessee could maintain some financial independence should the American dollar collapse, an event that is turning into "a very real possibility as the world moves away from the greenback as its reserve currency," he wrote.
This is also one of the factors that has influenced central banks around the world to purchase more and more precious metals. Last year was considered a record-breaking year for central bank gold buying, according to the World Gold Council, as the world's central banks purchased 1,136 tonnes (1,252 tons) of gold.
This is the highest level of net purchases on record dating back to 1950, and the 13th straight year of net central bank gold purchases.
While Tennessee is not a central bank, and it will have a hard time competing with the resources entire nations have, the passage of HB 1479 and SB 529 will still set a foundation for proper financial independence for Tennessee in the event of a financial crash.
Learn more about the governments and central banks stockpiling precious metals like gold and silver at Metals.news.
Watch this episode of the "Health Ranger Report" as Mike Adams, the Health Ranger, discusses how to trade gold and silver as ETFs through brokerage accounts.