Texas’ Gold Depository Could Challenge Federal Power
Gold is power.
We know that gold historically holds its value over time and serves to preserve wealth, especially in times of economic chaos. But gold also offers its holder political power.
Countries that stockpile gold create a foundation of stability for their monetary systems. This is precisely why China is increasing its gold holdings. As we reported last week, China now boasts the fifth largest story of physical gold in the world. The country continues to buy up the precious metal as it eyes a more dominant role in the world’s monetary system.
But it’s not just countries looking to gold to provide political clout and economic power. Texas recently laid the groundwork for its own gold depository. The reason? To wrest some economic power from the Federal Reserve by bringing some monetary autonomy to the Lone Star State.
Governor Greg Abbot signed a law creating the state gold bullion and precious metal depository last month. In his signing statement, Abbot emphasized the autonomy the new facility will provide the state.
…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 Star-Telegram reported that the primary goal of the depository is to “bring home more than $1 billion in gold bars that are owned by the University of Texas Investment Management Co. and are now housed at the Hong Kong and Shanghai Bank in New York.” Under the new law, Texas gold will be beyond the purview or control of any “governmental or quasi-governmental authority” not directly administered by the state.
Controlling its own gold supply shifts power to the state, away from the federal government and other non-government entities. Control is power, and Texas just got a lot stronger. On top of that, having its gold secure within its borders broadens its options should a economic meltdown occur.
Representative Giovanni Capriglione sponsored the bill creating the new depository. During a recent radio interview, he said that the 2008 financial crisis and the very real possibility of a future US dollar collapse spurred the gold depository idea. “It really kind of brought to bear the idea that we need some kind of Plan B,” he said.
But the existence of a state gold depository opens the door to possibilities much grander than merely providing security for state assets. As Capriglione pointed out during the interview, it has the potential to undermine the Federal Reserve’s monopoly on money.
The really interesting part about this depository, which hasn’t been getting a lot of press, is that with this depository, private individuals and entities will be able to purchase goods, and will be able to use assets in the vault the same way you’d be able to use cash.”
In other words, Texans will be able to conduct transactions backed by gold stored in the state depository, bypassing the dollar and the central bank completely.
That’s real power.
Individuals can also seize some of that power for themselves. When you keep your savings in US dollars, your financial security rests in the hands of central bankers. A monetary crisis could completely wipe out your hard-earned wealth. But when you save in gold, you hold real money in a form that no politician can manipulate or inflate away.
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