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The lack of faith in central bank trustworthiness is spreading. First Germany, then Holland, and Austria, and now – as we noted was possible previously – Texas has enacted a Bill to repatriate $1 billion of gold from The NY Fed’s vaults to a newly established state gold bullion 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,” and the Bill includes a section to prevent forced seizure from the Federal Government.
From 2011:
“The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.”
The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.
“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview.“I look at gold as just another currency that they can’t print any more of.”
And now, after we noted the possibility previously, as The Epoch Times reports, Texas Governor Greg Abbott signed a bill into law on Friday, June 12, that will allow Texas to build a gold and silver bullion depository. In addition, Texas will repatriate $1 billion worth of bullion from the Federal Reserve in New York to the new facility once completed.
On the surface the bill looks rather innocent, but its implications are far reaching. HB 483, “relating to the establishment and administration of a state bullion depository” to store gold and silver coins, was introduced by state Rep. Giovanni Capriglione.
Capriglione told the Star-Telegram:
“We are not talking Fort Knox. 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.”
But isn’t New York, where most of the world’s gold is stored, also big and powerful? Why does the state of Texas want to go through the trouble of building its own storage facility?
There are precisely two important reasons. One involves distrust in the current storage system. The second threatens the paper money system as a whole.
“In a lot of cases with gold you may not have clear title to the metal. You may have a counterparty relationship that makes you a creditor. If the counterparty has a problem unrelated to gold, they can default and then you become an unsecured creditor in bankruptcy,” said Keith Weiner, president of the Gold Standard Institute.
This means you get whatever is left after liquidation, often just a fraction of the initial value of your holdings.
“This exact scenario happened with futures broker MF Global. I knew people who had warehouse receipts to gold bars with a specific serial number. But that gold had an encumbered title and they became unsecured creditors in bankruptcy,” said Weiner.
In Texas, two big public pension funds from the University of Texas (UoT) and the Teacher Retirement System (TRS) own gold worth more than $1 billion.
Being uncomfortable with holding purely financial gold in the form of futures and Exchange-traded Funds, University of Texas actually took delivery of the gold bars in 2011 and warehoused it with HSBC Bank in New York.
At the time pension fund board member and hedge fund manager Kyle Bass explained: “As a fiduciary, which I am in that position to the extent you own gold and you are going for a long time, and it’s not a trade. … We looked at the COMEX at the time and they had about $80 billion of open interest between futures and futures options. And in the warehouse they had $2.7 billion of deliverables. We are going to own it a long time. You are on the board, you are a fiduciary, so that’s an easy one, you go get it.”
Bass is implying that there is much more financial gold out there than physical, and that it is prudent to actually hold the physical.
Taking the gold to Texas would then also solve the counterparty risk. “In this case it’s going to be a depository, the gold is going to be there, they are not going to be able to lend it out and it won’t serve as collateral for other transactions of the bank.” said Victor Sperandeo of trading firm EAM Partners. “Because if the bank closes, you are screwed.”
“I think that somebody was looking at that, we better have this under our complete control,” said constitutional lawyer and gold expert Edwin Vieira, of the Texas bill. “They don’t want to have the gold in some bank somewhere and in two to five years it turns out not to be there.”
So far most of the attention has focused on the part of the depository and the big institutions. However, the bill also includes a provision to prevent seizure, which is important for private parties who want to avoid another 1933 style confiscation of their bullion by Federal authorities.
Section A2116.023 of the bill states: “A purported confiscation, requisition, seizure, or other attempt to control the ownership … is void ab initio and of no force or effect.” Effectively, the state of Texas will protect any gold stored in the depository from the federal government.
And free from the threat of confiscation, private citizens can use gold and silver as money, completely bypassing the paper money system.
“People can legally do that with gold contracts. The difficulty is the implementation. Now Texas has set up a mechanism with the depository. We have accounts in that institution and can easily transfer back and forth certain amounts. So we can run our money system a gold or silver basis if we were so inclined,” said Vieira.
This would not be possible if the gold is stored in a bank because of the risks of bank holidays and bankruptcies. It would also not be possible if the federal government could confiscate gold.
According to Vieira, this anti-seizure provision rests on Article 1, section 10 of the Constitution of the United States, which obliges the States to not make anything tender in payment of debts apart from gold and silver coin.
“If someone from the Department of Justice comes along you are going to see legal and political fireworks. The state is going to say ‘we need to have a mechanism to make gold and silver money. This is pursuant to the constitutional provision we have. You can’t touch this. Our state power on the constitutional level is more powerful than any statute you may pass,’” said Vieira.
Because one of the litigant parties is a state, the case would go directly to the Supreme Court.
“We are talking about something completely new in terms of the legal playing field. This is no longer a fringe concept,” he adds, but cautions about a possible fight with the federal government: “We will have to see how committed the governor and the attorney general are.”
Official Statement from Governor Abbott:
Governor Greg Abbott today signed House Bill 483 (Capriglione, R-Southlake; Kolkhorst, R-Brenham) to establish a state gold bullion depository administered by the Office of the Comptroller. The law will repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas. The bullion depository will serve as the custodian, guardian and administrator of bullion that may be transferred to or otherwise acquired by the State of Texas. Governor Abbott issued the following statement:
“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. 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.”
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Is this the first step down a road to secession? Notably, they’ll need that gold to establish their own country once they win the potentially imminent war with the US military which starts on Monday (Jade Helm).
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This implicit subordination of The Fed’s gold sends a more ominous signal of rising fears of confiscation and leaves us wondering just how long before every state (and or country) decides to follow Texas’ lead?
Muammar Gaddafi thought his gold was safe also. It didn’t work out so well for Libya. Jade Helm being conducted there now makes sense.
And they dragged his ass through the streets. Tried to tear him apart. Fu%!#ng animals….
OUR ‘animals’
.
Had to chuckle when I read the first paragrah, as two thoughts came to mind.
IS there ANY gold – or just paper?
And WHY would the Fed give anything back? Who, exactly, is going to ‘make them’? They answer to no one, and have their own private force.
.
“Is this the first step down a road to secession? Notably, they’ll need that gold to establish their own country once they win the potentially imminent war with the US military which starts on Monday (Jade Helm).”
The exercise begins July 15-Sep. 15. I keep seeing the dates wrong.
Also, it is rumored that this current 84th TX legislature is functioning in it’s De Jure(legitimate, lawful) capacity, as opposed to De facto. We will see.
I wouldn’t trust the Texas govt. any more than I trust the Fed. This whole thing sounds contrived. I don’t think the Jew York City Jews would allow the Texas govt. to expatriate 1 billion in gold to Texas unless there were some other Jews( or their representatives) waiting in Texas to receive it. Maybe the Jew York City Jews have to much fake gold laying around and they want to get rid of it. I didn’t see anywhere in this article about where the Texas govt. plans on keeping this gold (unless I missed it) but there is a federal reserve in Texas.
Which begs the question; why would the Texas govt. try to do an end run around the Jews? They’ve been working for them the whole time. Why now? Am I supposed to believe they just up and decided to stop working for their masters?
Altruism and greed don’t mix and I smell a script and I’m hearing scripted lines.
It is a shame when good things appear to be happening, that we can’t trust it, been lied to too many times.
Could see this occurring if every Texian stood up, well armed, along side the governor and others. The other states would come to defend also, imo.
Your absolutely right Katie. It is a damn shame that the truth is pretty scarce these days. All I can do is use the limited knowledge I have about how the world really works to ask questions. Usually, when I see an article and it is so obviously phony I just make a dumb joke in the comments section. But this article made me throw out some points and ask questions about what’s really going on behind the curtains.
When greed rules the planet, “trust” becomes one of it’s victims.
tc, I feel that it does not matter where the gold is or isn’t. They’ve been flying this economy on a “wing and a prayer” for quite some time and, quite frankly, it’s amazing the job they have done because “the show must go on, no matter where the gold is, let’s just print money out of “thin air” until we end up wiping our ends with it. Oh man, when the dam bursts, take a deep breath just before the water engulfs you. After that, it just boils down to the grace of God. At that point, it would be wise to have a pre-planned fallback position and be able to just say, “See you on the other side.”
At this point, if you haven’t “got ‘er done”, time’s a wastin’! The time is now. Get your ducks in a row!
Hi, Millard. I’ve been waiting for the SHTF for a while now. When the greed machine does start eating itself a whole lot of people are going to die. If i’m going to die I at least want to know why and hopefully take some communists with me when I go.
I don’t have much use for gold myself. If I can’t drink it, eat it, smoke it, or shoot it then it isn’t worth much to me. Although I have heard you can make bullets out of silver…lol.
Well, if this is legit, then I expect Abbott to be assassinated…and if it’s not legit, he won’t be. Honestly folks, I hate to be this cynical (living in Texas and all). But dang it, with the new Open Carry laws Abbott recently signed as well, I really do wonder if Abbott or someone he trusts really does know what Jade Helm in Texas is about.
Then again it could simply be gold owned by the oligarchs, such as the Bush’s, and when ordinary Texans start putting gold into this depository, that is when Feds move in with troops (and of course they will leave Bush’s gold where it is, only taking the People’s!)
As a friend of mine always writes as his signature on e-mails: God Bless Texas!
Huh? Bush and all the bandits have the gold in Paraguay. It may even have been a bed and breakfast for Hitler back in the day. Remember grandpa Prescott? They may have built an amphitheater for Darth Chaney to perform blood sacrifices and Devil worship. “There’s no proof of me eating children although the heart muscle is particularly delicate.” Remember people, Bush, Chaney, Blair and the rest dined on “honey dew” and all of them, including Queen Elizabeth and Prince Charles, Prince Andrew, and other inbreeds are beyond “sick”, and need to be killed in the most gruesome fashion fathomable. They deserve nothing less.
What the Texas government needs to do is in addition to start decoupling itself from the “Wipe your hind end FRN” with a competing gold, silver, copper competing currency. At the same time acquire in large tonnage Medium tanks at least with the latest armor and most reliable drive trains and targeting systems. That goes for Fighter plains as well. The Texas State guard should be reequipped with MBRs like the M14 but in Texas. To hell with the feds. Munitions stock piles procured and dispersed to Texas Guard and especially Militia units. Secure any fissionable materials held under the federal’s control quickly and forcefully. All of it!!! That probably should be priority 1 over all the above. Put up border controls into Texas from all points of the map. What will follow will soon make the point moot on account of the battles.
Next is start taking over the Feral military bases and displacing their personnel out of state. Be prepared for a violent response from Homeland Security NKVD goons as far as assassinates. That is the way to poke the dragon with a sharp stick to make him attack. Then clean their clock.
Radical Ideas?? Now how radical were our ancestors at the Lexinton Bridge?