Sen. Jerry Klein, R-Fessenden, assistant majority leader, speaks on the Senate floor during the organizational session on Dec. 4, 2024. (Michael Achterling/North Dakota Monitor)
The Senate voted down a bill that would have required the state treasurer to invest 1% of the state treasury in gold and silver bullion.
House Bill 1183, sponsored by Rep. Daniel Johnston, R-Kathryn, failed on a 34-13 vote Monday.
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Sen. Jerry Klein, R-Fessenden, said while the bill had good intentions, the state treasurer is “just handling the checkbook.”
He said the state’s general fund, and other funds controlled by the state treasurer, are the wrong funds to be used for investing.
“If you buy gold and silver, you buy it as an investment that you will hold in hopes of increasing in value,” Klein said. “You don’t convert that monthly so you can make your house payment, or your car payment, or everyday expenses. You need some liquidity.”
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Klein added the State Investment Board and Department of Trust Lands can already make investments into precious metals, if they choose.
The Bank of North Dakota would also need about $2 million to renovate its vault to accommodate the metals which could weigh in the tons, Klein said. He added the housing of precious metals would create new ongoing costs for managing the state’s supply.
Sen. Dale Patten, R-Watford City, said the gold and silver investments are not part of the state’s comprehensive investment plan and voted against the measure.
During the public hearing for the bill, Johnston told lawmakers that other nations are moving away from the U.S. dollar as a foundational currency and wanted the state to control something that would be independent of inflationary pressures.
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Johnston also pointed out that the U.S. dollar loses 2% to 3% of its value every year while gold has appreciated greatly in recent decades.
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