Beneath the Surface
Smart States Are Embracing Gold And Silver
July 15, 2025 • 8 minute, 50 second read
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.”
— Alan Greenspan
July 15, 2025 — It’s nice that states are separating themselves into “smart” and “stupid” categories so Americans can tell where and where not to live. The issue of sound money, in particular, is indicative of a whole range of other likely tax/spend/regulate policies that affect quality of life.
Let’s start with a flashing “don’t move here” signal just sent by Washington state:
New WA State Bullion Tax Passes
(Bellview Rare Coins) – Starting in 2026, WA state residents could be paying sales tax on gold, silver, and coins – due to a new bill that recently passed the Washington State legislature.
Currently, bullion is exempt from retail sales tax. But SB5794, a broad bill that recently passed both houses of Washington’s legislature, is set to change that.
If nothing changes, gold could soon be taxed at up to around 10% – meaning that $3,300 ounce of gold could soon cost you over $3,600!
Currently, sales tax applies to most purchases – but bullion, like gold and silver coins and bars, has long been excluded. This means that you can buy bullion with no sales tax.
However, SB5794 completely revokes that sales tax exemption (and makes many other changes to Washington’s sales tax exemptions, as well).
This is a repeal of a “tax preference”, or exemption, and it’s set to take effect at the start of 2026. The bill fully passed both chambers of the legislature and has been signed by the governor, as of late May, 2025.
Reading Between the Lines: Washington’s Budget Shortfall
The Washington State Legislature is scrambling to fill an estimated $15 billion budget shortfall over the next 4 years. As a part of this process, the legislature is surely looking at ways to implement new taxes — or in this case, repeal an existing tax “preference” or exemption.
Washington is a poorly run state with one positive law: no state income tax. But the downside of not taxing incomes is that revenue has to be found elsewhere, so every couple of weeks brings some new nickel-and-dime increase in sales taxes, property taxes, or operating fees.
Taxing gold and silver implies, to a small but wise segment of the population, that the guys in charge don’t understand the concept of “money” — always an ominous sign for a government.
Meanwhile, at the smart end of the spectrum
Texas Greenlights Gold and Silver as Legal Tender
(Schiff Gold) – Austin, TX keeps rewriting the monetary rulebook. House Bill 1056, cleared by both chambers in late May, designates properly marked gold and silver “specie” as legal tender in the Lone Star State starting September 1, 2026. A second phase—launching no later than May 1, 2027—authorizes an electronic payment rail fully backed by bullion stored in the Texas Bullion Depository. While Federal Reserve notes remain king for now, the measure lays fresh track for Texans who prefer metal over paper or pixel money.
The bill also sketches out the digital future of hard money. The comptroller may license electronic platforms that let consumers send fractions of ounces with smartphone ease, all fully redeemable in physical metal. Fees must be “reasonable and necessary,” and pricing must reflect commercially available spot quotes at the moment of each transfer—critical guardrails in a world where a Monday rally pushed gold to $3,308 per ounce. Notably, vendors headquartered in Texas receive preference when bidding to build the system, signaling lawmakers’ desire to keep bullion-tech jobs on home soil.
Arizona Senate Committee Passes Bill to Establish Bullion Depository and Transactional Gold-Backed Currency
(GoldFix) – On Monday, an Arizona Senate committee passed a bill that would establish a specie-backed transactional currency and a state bullion depository.
Sen. Jake Hoffman introduced Senate Bill 1633 (SB1633) on Feb. 5. The proposed law would establish the Arizona Bullion Depository. The depository would serve as safe storage for precious metals and would facilitate the issuance of state-minted gold and silver coins, along with a specie-backed transactional currency.
The bullion depository would serve as the “custodian, guardian and administrator of certain bullion and specie that may be transferred to or otherwise acquired by this state or an agency, a political subdivision or another instrumentality of this state.”
Arizona Senate Committee Passes Bill to Establish Bullion Depository and Transactional Gold-Backed Currency
(GoldFix) – On Monday, an Arizona Senate committee passed a bill that would establish a specie-backed transactional currency and a state bullion depository.
Sen. Jake Hoffman introduced Senate Bill 1633 (SB1633) on Feb. 5. The proposed law would establish the Arizona Bullion Depository. The depository would serve as safe storage for precious metals and would facilitate the issuance of state-minted gold and silver coins, along with a specie-backed transactional currency.
The bullion depository would serve as the “custodian, guardian and administrator of certain bullion and specie that may be transferred to or otherwise acquired by this state or an agency, a political subdivision or another instrumentality of this state.”
Transactional currency backed by gold or silver
Under SB1633 the Director of the Arizona Department of Insurance and Financial Institutions would be required to issue specie (gold or silver coins minted by the state) and establish a transactional currency “as the director determines to be practicable.”
New Jersey Eliminates Sales Taxes on Gold and Silver
(Money Metals) – Sound money advocates are hailing their hard-fought victory today as New Jersey’s Senate Bill 721 was signed into law – thereby removing sales taxes on purchases of gold, silver, and other precious metals above $1,000 effective January 1, 2025.
The long-anticipated bill signing by Gov. Phil Murphy positions New Jersey alongside 44 other states that recognize the importance of exempting constitutional sound money from burdensome taxation.
Senate Bill 721 enjoyed unanimous support from both sides of the political aisle, including 13 Democrat and Republican formal sponsors.
Idaho Reaffirms Gold and Silver As Legal Tender
(Sound Money Defense League) – For the second time this month, new sound money legislation has become law in Idaho.
Faced with the overwhelming likelihood of a veto override from the legislature, Idaho Governor Brad Little signed the Idaho Constitutional Money Act of 2025 reaffirming gold and silver as legal tender and making a symbolic statement in favor of sound money principles.
House Bill 177, sponsored by Rep. Steve Miller, marks the third pro-sound money bill enacted this year, highlighting a sustained national trend that continues to grow.
HB 177 simply affirms that gold or silver coin and specie issued by the United States government are considered legal tender whenever voluntarily agreed upon by both parties to a contract. The measure enjoyed popular support, earning approval in the state House with a 66-3-1 vote and unanimous passage, 35-0, in the Idaho Senate.
Utah Greenlights Gold and Silver Holdings to Protect State Reserve Funds
(Money Metals) – Utah Governor Spencer Cox signed legislation on Thursday empowering the state Treasurer to secure state funds with a significant allocation to physical gold and silver.
Sponsored by Rep. Ken Ivory, House Bill 348 permits the Treasurer to hold up to 10% of certain state reserve accounts in precious metals to help secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in Federal Reserve Notes.
The Utah State Treasurer has limited options for holding, managing, and investing state monies, making this enabling legislation necessary.
Utah’s reserves are invested almost exclusively in treasuries, municipal bonds, corporate bonds, and agency debt.
These debt instruments carry risks – especially because they are not inflation-hedged and are therefore largely unprotected from the steady erosion in the real value of principal, coupled with interest rates that are often negative in real terms.
John Rubino
Substack and Grey Swan Investment Fraternity
P.S. from Andrew: Governments making it easier to transact and own gold, decades after first outlawing its use, is a refreshing step in the right direction. And it’s a sign that we’re still in the early stages of a revaluation of gold and silver prices.
Regarding yesterday’s note on gold mining stock share dilution, reader Kurt notes:
This is a poor and superficial analysis of Barrick. It fails to mention the billions in debt that it paid down in the last decade. It also made no reference to their acquisition of a major international miner 6 or 8 years ago. Additionally, they have more foreign properties than many North Am. miners as a result of that merger, some in less-than-ideal mining jurisdictions. (Mali comes to mind.)
Kurt, you’re absolutely right. My analysis of Barrick was superficial and incomplete.
That’s because I focused on one metric: share count.
As seen in yesterday’s analysis, Barrick tripled their shares outstanding over the past 25 years.
If you owned 3% of the company in the year 2000, you now owned 1% of a company that was about 3 times larger – effectively meaning your total valuation stayed the same. At the same time, gold prices themselves fared much better.
It’s true that Barrick – and other major miners like Newmont – have been making big acquisitions in recent years, paying down debt, and doing the right and responsible thing.
But when they issue so many new shares to achieve those goals, they lead to poor returns for existing investors. I know this firsthand, as I’ve been one of them. Newmont’s shares have also taken a 7% hit today as the company’s CFO unexpectedly resigned. That level of market reaction shows the danger of being in the wrong mining stock.
The first financial goal of any publicly-traded company is to increase shareholder value. Likewise, your goal as an investor is to buy companies whose shares can show the best appreciation relative to risk.
In the gold mining space, the biggest names may be faring well operationally, but usually – almost always – when they issue shares it’s dilutive.
We’re drawing attention to this practice so that our members can be better informed investors and best benefit from what we see as a massive increase in gold prices in the years ahead.
Think about it this way: You’re not going to come out ahead as an investor if a company dilutes the value for shareholders as fast as it’s being created. Even if that company is otherwise growing earnings and revenues.
Only a handful of gold companies have been like Agnico Eagle Mines – and been only slightly dilutive with their shares. Agnico also uses a metric of ounces of gold per share, and as long as they can make deals where that number goes up, shareholders will likely get the best bang per buck.
Your thoughts? Please send them here: addison@greyswanfraternity.com
