Posted on 07/15/2015 4:37:37 PM PDT by VitacoreVision
The State of Texas is setting up a gold-backed bank that will allow depositors to bypass the controversial Federal Reserve System and its fiat currency in banking and commerce, according to the state representative who authored the recently enacted law. Under the measure, passed overwhelmingly by lawmakers and signed in mid-June by Republican Governor Greg Abbott, Lone Star State officials will establish and operate the Texas Bullion Depository for anyone who would like to deposit and trade in precious metals. The implications are as big as Texas.
While some analysts have said the move may be another sign heralding Texas’ eventual secession from the union, or preparation for financial Armageddon, its advocates say the depository simply makes financial sense. Among other benefits, the institution will provide more options to consumers weary of the increasingly troubled traditional banking and monetary system, which is viewed by the public with growing suspicion. And experts say the effect of making it easier to use sound money in commerce could be far-reaching.
Among other immediate effects, the law creating the first state-level gold-backed bank in the nation, House Bill 483, will involve repatriating about $1 billion of Texas gold from New York. Conflicting news reports and official statements say the state’s precious metals stockpile is being held either by HSBC in New York, or by the powerful New York Federal Reserve Bank, a privately owned outfit cloaked in secrecy with immense power over the U.S. economy. First, though, officials will need to select a home for the Texas depository.
“Today I signed HB 483 to provide a secure facility for the State of Texas, state agencies and Texas citizens to store gold bullion and other precious metals,” said a statement issued by Governor Abbott, a popular conservative governor, after the ceremonial signing. “With the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state.” The law protects the assets from seizure by the feds or other forces, too.
There will be many other benefits as well, according to supporters. While other states have in recent years passed legislation declaring gold and silver to be legal tender, analysts say Texas’ new depository could help supercharge the growing movement for an honest and sensible monetary system founded on real money rather than debt-based paper notes conjured into existence by a private banking cartel. Indeed, one of the chief aims of gold-and-silver-as-currency proponents is to restore sound money — and the Texas law could help pave the way.
Tenth Amendment Center chief Michael Boldin, whose organization promotes states’ rights to rein in the feds under the 10th Amendment to the U.S. Constitution, called the law “an important first step towards gold and silver as commonly-used legal tender in the state.” He said the move has the potential to open the market to sound money, even in day-to-day transactions. “By making gold and silver available for regular, daily transactions by the general public, the new law has the potential for wide-reaching effect,” Boldin added.
The Tenth Amendment Center also highlighted the constitutional implications. Noting that Article I, Section 10, of the U.S. Constitution prohibits state governments from making anything other than gold and silver a tender in payment of debts, Boldin said the bill takes Texas a step toward fulfilling that long-ignored constitutional obligation. “Such a tactic would undermine the monopoly the Federal Reserve system by introducing competition into the monetary system,” he said.
Other experts also highlighted those effects. “Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a ‘reverse Gresham’s Law’ effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes),” explained constitutional-tender expert William Greene in a paper for the market-oriented Ludwig von Mises Institute.
“As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state — as people in other states carry out their desire to bank with sound money — and an eventual outcry against the use of Federal Reserve notes for any transactions,” added Greene, who also testified in favor of the law in his capacity as a private citizen.
The new law can also help protect depositors from other downsides of the present monetary regime — the risks inherent in fractional-reserve banking, for example — while still providing many of the conveniences associated with a bank account. Indeed, the depository will engage in many of the functions associated with traditional banking: The ability to store wealth for safe-keeping, the ability to write checks against deposits to transfer funds, and so on.
But in other respects, the institution will function very differently from a traditional bank. For instance, depository accounts will not pay interest, according to the law, nor will the deposits be loaned out to borrowers under the prevailing fractional-reserve banking regime. In an interview on the popular TruNews radio program, the state lawmaker behind the law celebrated the way in which the institution will operate as a major benefit for potential clients.
“This is different than your traditional bank — a traditional bank lends money,” said Texas Representative Giovanni Capriglione, who authored and sponsored the legislation. “Especially if you're in Greece right now, you know that if you go to the bank, and everybody went to the bank to try to get their deposits out, there's not enough paper money to cover it. That causes a whole bunch of concerns. What this depository does is, it doesn't allow that — if there are 5,000 bars of gold in there, there will be 5,000 gold bars there, and you'll be able to access your deposits directly upon demand.”
Depositors will also be able to write checks against their gold deposits to pay others, continued Rep. Capriglione, calling the measure a “big deal.” “You can write checks to individuals who have gold depository accounts, and you’ll also be able to write checks to individuals and corporations who don’t have gold depository accounts,” he explained. “We set up a system of depository agents so you can have any corporation, any group, basically start a depository agent, and they can send and receive through this depository system, outside of the Federal Reserve System.” Public entities will also be able to participate.
It will not be just Texas citizens, governments, agencies, and businesses taking advantage of the new options, either. “We are not talking Fort Knox,” Capriglione told the Star-Telegram newspaper. “But when I first announced this, I got so many emails and phone calls from people literally all over the world who said they want to store their gold … in a Texas depository. People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold.”
Some conservative and liberty-minded activists expressed concerns about the law because it creates yet another state agency. However, writing in the market-oriented Ludwig von Mises Institute, economist Ryan McMaken argued that the benefits outweigh the downsides in this case. “While the Texas depository is a government-owned enterprise, it nevertheless is an improvement since it is a case of decentralization (and arguably nullification) which provides alternatives to the federally controlled monetary and banking systems,” he said. “As Hayek and other Austrians noted for decades, a decentralization of the monetary system is a key first step in moving toward more sound money.”
The depository will be run by an administrator appointed by the Texas Comptroller, whose office will oversee the institution. The chief of the Texas depository will have to be approved by various state executive and legislative officials. Any profits made will be handed to the general revenue fund, potentially benefiting taxpayers beyond the savings associated with repatriating the state’s gold. The full text of the law is available here.
A similar bill was introduced in 2013 but did not gain traction. This year, though, lawmakers approved it by a landslide margin, with 140 to 4 in the Texas House and 27 to 4 in the state Senate. Now, energized activists in other states are hoping to see similar measures across the country — with the ultimate goal of eventually restoring sound money and an honest economy free from the clutches of the Federal Reserve.
Related articles:
University of Texas Takes Possession of $1 Billion in Gold
Texas Bill Would Prepare for Federal Meltdown
Oklahoma Affirms Gold and Silver as Legal Tender
Gold and Silver Currency Bills: Will States Nullify the Fed's Money Monopoly?
Gold Price Suppressed to Benefit Beijing, Says Top Expert
Gold, Silver Now Legal Tender in Utah
Has the Federal Reserve Sold the Gold at Fort Knox?
Fed Manipulations in the Crosshairs
The Federal Reserve: Bankers for the New World Order
Texas State Bill Will Nullify All Federal Unconstitutional Acts
Texas Guard to Monitor Federal “Jade Helm” Military Exercise
After Gold Crash, Experts Point to Central Bank Manipulation
Article V Convention.
Texas’ Gold is NOT in the NY Fed, it’s in a private HSBC bank in New York.
Does anyone else know if this is only for Texas residents and businesses?
The article is somewhat ambiguous about this issue and, researching the net, all the information seems to indicate it’s just for Texas.
That would actually make sense if that were to be the case, because the Feds would be unable to stick their noses in Texas’ business.
It's held by HSBC. The Federal Reserve doesn't hold gold for private individuals or private companies.
“While other states have in recent years passed legislation declaring gold and silver to be legal tender”
The Constitution is quite clear on this point. While good hearted I suppose, simple adherence to that now ignored document would render such legislation unnecessary.
L
So do you pay them to store your gold, or is this a service paid for by the taxpayers of the State of Texas?
Previous articles from last month that were posted on FR.
The gold isn’t in the Feds but a bank located in NYC.
http://www.freerepublic.com/focus/f-news/3299938/posts
Writing’s On The Wall: Texas Pulls $1 Billion In Gold From NY Fed, Makes It “Non-Confiscatable” ^
http://www.freerepublic.com/focus/f-news/3300204/posts
BREAKING: Texas Signs Bill to Get GOLD from Fed ^
http://www.freerepublic.com/focus/f-news/3301275/posts
Texas Building New Facility To Store Gold Reserves Out of Reach of Federal Confiscation or Seizure ^
http://www.freerepublic.com/focus/f-news/3307810/posts
Texas wants its gold back inside the state’s borders ^
The State of Texas is neither.
In a perfect world that might happen. In today's world there will be a bubble where everybody buys "Texas" which will pop when everybody sells Texas. The legal framework will have some safeguards against this, but the market will work around those. For example the legal framework may say that out-of-state residents can only put money in term deposits, not demand deposits. But the market will create demand deposit accounts that will be invested in Texas term deposits. That will of course exacerbate the crash.
I like currencies chosen by people who are completely free to chose whatever currency they want. I want people to have the choice of Texas gold if they want it. But Texas should take advantage of the demand and automatically convert some small percentage into long term state-issued bonds backed by income producing infrastructure (e.g. toll roads, nuke plants, etc). People could still sell their bonds to get all the capital back but at least there would be a small commitment to tamp down market froth.
Texas doesn't own any gold either. It's owned by the University of Texas Investment Management Corporation, a private entity established by the University of Texas to manage and invest the money in its endowment.
Regardless, even if the money was owned by the state of Texas it still wouldn't be at the New York Fed. They only store gold for foreign countries, foreign central banks, and a limited number of international organizations.
Well have Texas go to the folks at the New York Fed and demand their gold. Let us know how that works out.
Link please, to that info. I do recall someone on FR mentioning this.
I was going to ping you to this thread but I see you found it.
Sounds like a bad move. One of the Tx secessionists on here told me they plan to deport everyone on SocSec and Medicare back to the US and seize their homes without repayment.
“While other states have in recent years passed legislation declaring gold and silver to be legal tender”
GA being one of them. I wish we could open our own bank. Right now I think ND is the only state in the Union with a state bank. Well and now Texas. Smart.
Sounds like a bad move. One of the Tx secessionists on here told me they plan to deport everyone on SocSec and Medicare back to the US and seize their homes without repayment.
That’s hard to believe. Can you send that to me?
This was in 2014.
My chances of finding that post are about as good as winning the Powerball.
It’s all a joke anyway.
I always tell them be sure to alert me when the first Texas governor, lieutenant governor, secretary of state, attorney general, or member of the legislature is elected who is advocating secession.
So far I haven’t gotten any alerts.
I will be a casual observer of this. Could be quite interesting.
Yes sir!
Will they accept BitCoin?
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