Texas would like its gold back from the Yankees, regardless of where they are keeping it.
Governor Greg Abbott authorized a law last week to create a depository for its 5,600 bars of the precious metal and, as he mentioned in a statement, “repatriate $1 billion of gold bullion from the Federal Reserve in New York.”
The gold, as it happens, is not at the New York Fed — it is in a leased vault in midtown Manhattan — and is really worth about $650 million. No matter, Texas seeks to bring it home.
“We want to show off our strength and resilience,” stated Giovanni Capriglione, the Republican lawmaker who subsidized the repatriation bill. “This is to be able to say, ‘Hey, listen, Texas is unique, it’s stable, it’s strong and we can show that by letting other states and individuals know that, yes, Texas has a billion dollars worth of gold. Does your state have a billion dollars worth of gold?’”
Knowledgeable that the value is about $350 million short of that, Capriglione mentioned he was no less proud.
The gold in question is not the property of the state itself but of the University of Texas Investment Management Co., which supervises the second-largest academic endowment in the country.
That is not very likely to reduce what Philip Diehl, a former director of the U.S. Mint, termed “a wonderful marketing opportunity” for the state, where the electorate leans right.
For the governor and lawmakers, repatriation “makes a lot of political sense,” stated Diehl, president of U.S. Money Reserve, an Austin company that sells gold. “It’s a very reasonable response to their constituents.”
Bruce Zimmerman, chief executive officer of the endowment fund, stated it would be delighted to have a Texas safe for its ingots so long as the state does not charge more than what the fund’s paying to lease the New York vault space, which is less than $1 million a year.
There are particulars to be worked out. For one, where to put the depository, a task granted to the Texas Comptroller of Public Accounts. One likely prospect is behind a bullet-proof door in the basement of a Travis County office building, where a long-gone bank used to keep safe-deposit boxes.
“When you’re talking about gold, people’s eyes light up,” stated comptroller spokesman Chris Bryan. “But when you’re talking about what you need to do to house that gold, from a logistics standpoint it’s very complicated and one that we don’t have a whole lot of experience with.”
No state truly does; Texas would be the first to have its own gold reserves storage unit.
It may perhaps as well be the only one to own physical gold, reported by Diehl, the former mint director. The endowment fund began buying it in 2008 as a hedge against what Zimmerman stated was excessive monetization by central banks.
There was little resistance to repatriation voiced throughout legislative debate.
“We’re not changing our currency, right?” Democratic Senator Juan “Chuy” Hinojosa inquired. He was guaranteed the greenback would still be legal tender, and voted yes.
Kirk Watson was one of 4 Democrats in the Senate to go the other way. Why? “Cause it’s weird,” he stated.
The Senate voted 27-to-4, and the House 140-to-4.
Abbott, the Republican governor, rejected to be interviewed. Neither he nor Capriglione are recognized as gold bugs, the detractors of central banks and governments that issue money without guaranteeing to exchange the cash for gold or silver.
The 2 did come up the positions in Texas with assistance from the Tea Party, which has a gold-themed monetary plan. And the law does set up a framework for a system under which Texans could inevitably execute financial transactions backed by gold in the depository, which include purchasing a house or paying taxes.
But Capriglione, who signifies suburban Fort Worth, stated it “isn’t some back-door way to create a Texas dollar or Texas currency.” He mentioned getting the gold back to the Lone Star State was about protection.
“Whenever you look at these economic collapses, it’s always based on consumer confidence,” he explained. “It does make people feel more secure to have the gold here. It just does.”
Texas has a suspicion of the federal government that is appropriate for a state that was once a country. Former Governor Rick Perry initialized its National Guard last year to protect the Mexican border, expressing Washington was doing a stinkin’ job. Abbott focused state forces to keep track of a U.S. military training exercise named Operation Jade Helm 15 that will take place this summer in Texas and other states. Conspiracy theorists say it’s a scam to round up political dissidents, enforce martial law or both, claiming tunnels under Wal-Mart stores are somehow included.
Now, along with keeping intruders at bay, the state will have to prepare to guard against a gold heist.
“There is completely no reason to think the state of Texas cannot safeguard gold as efficiently as any of the other large commercial vaults around the country,” stated Diehl, the former mint director.
“After all, we have the Texas Rangers.”