Wyoming Would Buy $10 Million In Gold Under Plan Approved By Committee

Gold commodities have been skyrocketing and has gained momentum since the election of President Donald Trump. Now the Wyoming Legislature is looking to get in on the action with a proposal that would require the state to buy more of the precious commodity. 

On Thursday, the House Appropriations Committee passed Senate File 96, a bill that would require the state treasurer to hold and invest at least $10 million in gold. The bill passed on a 5-1 vote with state Rep. Trey Sherwood, D-Laramie, the only member to vote against it.
The bill sponsor, Sen. Bob Ide, R-Casper, wants Wyoming to become less dependent on U.S. dollar-based investments, stocks and bonds. He worries that in a cataclysmic financial event where the value of the dollar drastically plummets, Wyoming needs some outside financial protection.

“It’s not really an investment, it’s a strategic asset, a hedge against inflation,” Ide said. “I’m trying to protect our state’s wealth and citizen’s wealth.”

Although the state of Wyoming has the lowest amount of debt in the country according to the Cato Institute, Ide pointed out that the national debt in 2023 was $34 trillion. Now, that sum has risen to $36 trillion. In 1980, the debt went above $1 trillion for the first time, which means the U.S. spent more into its deficit in one year than the first 200 years of America’s existence.

During that two-year same timeframe, the price of gold has gone up from $1,800 per ounce to its current price of $2,944 per ounce.

“It shows you how gold is kind of a check against deficit spending,” Ide said.

Fool's Gold?

The state treasurer’s office is opposed to the bill. Patrick Fleming, CIO for the office, said the state can already buy gold if it wants to, but hasn’t because the metal has underperformed in the S&P 500 in the long term, posting 158% under performance over the past 10 years.

He also said Wyoming already has more than $4 billion in non-dollar securities, in addition to inflation protected securities. 

As far as the doomsday-type scenarios Ide is trying to prepare for, Fleming said he still doesn’t buy it.

“Even with our level of debt levels right now … you are still seeing a tremendous interest in the dollar,” he said.

Fleming also said the benefit of the state’s current non-dollar assets is that they can be bought and sold in a single day. He expressed doubt the same could be done with gold.

Russia and China have been selling off a significant number of treasuries and buying gold lately. Fleming said this is not an indicator of the high value of gold but rather the hundreds of millions in sanctions the U.S. put on these countries.

Fleming also said there’s only enough gold in the world right now to fill 3.5 Olympic-sized swimming pools.

Dawn Williams, deputy state treasurer, also spoke against the bill, saying the reason her office doesn’t invest in gold is because it represents unrealized capital gains. No money can be made off until it's sold.

“It would cost us money rather than make us money,” she said.

Rep. Jeremy Haroldson, R-Wheatland, remained unconvinced.

“If we look at where our nation’s gone, the devaluing of our dollar, look at what we’ve created,” he said. “What would happen if the dollar devalued at an extreme rate where we lost value on the world scene?”

Rep. John Bear, R-Gillette, suggested possibly making the $10 million stipulation optional when the bill moves to the House floor, but still supported it.

“I understand your mission is to generate the best revenues possible for the state and maximize those profits. I don’t think it’s a bad idea to have investments in these precious metals. 

How Would It Work

Ide said the state would likely only need to purchase around 10 gold bars to fulfill the $10 million quota. Where the gold would be stored was a question unanswered on Thursday, but Ide suggested storing it at The Wyoming Reserve in Casper, a new, Class 3 state-of-the-art high security vault, which he described as the “Fort Knox of the West.”

Josh Phair, CEO of The Wyoming Reserve, spoke in favor of the bill Thursday. He said the gold market has ramped up significantly over the last few years, and particularly since Trump took office, showing a 6.4% growth since that time.

“Since Trump won the election, things have been changing quite rapidly,” Phair said.

Phair would financially benefit from having Wyoming store its gold at his facility, which he said runs a 0.25% rate for storage. This would amount to $25,000 per year if Wyoming kept $10 million at the reserve, but Phair said the storage rate can go down if a larger sum is kept at the facility over the long term.

The bill would also direct the Department of Revenue to conduct a study to see how taxpayers could pay their property taxes with gold.

Buying gold has been looked at as a darling child within conservative circles over the past decade. Conservative political commentator Glenn Beck has hawked gold coins in the past, which he has promoted as America's salvation. President Ronald Reagan's budget director, David Stockman, also lamented the departure from gold as the root of America's "great deformation." 

The Federal Reserve Act of 1913 weakened the ties that bound U.S. currency to gold. Other ties were cut under President Franklin D. Roosevelt in 1933 and 1944. In 1971, President Richard M. Nixon severed the last tie between the dollar and the precious metal.

Leo Wolfson can be reached at leo@cowboystatedaily.com.