The latest post in our 'Huge Balls' series.
Colorado state Treasurer Walker Stapleton wants the ability to invest state money in foreign currency in the event of hyperinflation or devaluation of the U.S. dollar, he told the Legislative Audit Committee on Tuesday.
Stapleton, a Republican who took office in January, said that he would want to make such an investment only in a reactive rather than proactive manner if the value of the U.S. dollar begins to decline. But he believes his office should have the ability to make that choice, and he will ask legislators to offer a bill giving him that power next year, he said.
“It’s certainly not great for the brand of this treasurer’s office or any treasurer’s office to see a headline saying ‘State of Colorado investing in foreign currencies,” Stapleton told the committee.
“I view my responsibility first and foremost not to lose money. The next worst thing that a treasurer can do is not having proper liquidity,” he added after the meeting.
“If the safety of investing in foreign securities overrides the risk of investing in U.S. securities, that’s a difficult pill to swallow. But it’s one that we should be willing to do.”
State law now allows the treasury to invest only in U.S. securities, such as bonds. But an external audit by Buck Consultants recommended that it should research the benefits of allowing investments in high-quality foreign securities denominated in U.S. dollars at a time when credit rating agencies have made noises about downgrading the credit rating of U.S. currency.
Stapleton specifically cited the Canadian dollar and the Australian dollar as two foreign currencies in which he would be interested in investing.
He said also that he would like to look into investing in precious metals such as gold or silver as well if the U.S. dollar is devalued.
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