Bring Gold Back to Texas
The concern over centralized currency has long been present in the minds of many Americans. Texas, on the other hand, has taken these fears a step further.
According to the Washington Post, Texas governor Rick Perry and others in the state’s legislature are looking to bring the $1 billion reserve of the state’s gold – currently located at the Federal Reserve bank of New York – back to Texas soil.
The plan would effectively bring Texas’ reserves of gold back to the state in order to create the Texas Bullion Depository. The gold itself is owned by the University of Texas Investment Management Company.
While it would be easy to assume that Texas is looking to establish its own gold standards by pulling such a move, those behind this legislation claim that the reasoning is based upon establishing Texas’ reputation as one of the more financially secure states in the nation, which they claim would be especially important in the case of a nationwide financial crisis.
The concept of moving gold out of the Federal Reserve may seem new or “edgy,” but the fact is Texas is not the first entity to come up with such a notion. Germany stated in recent months that the country has hopes to bring its gold home from the U.S. Federal Reserve and back to German soil.
Based upon principles similar to those put forth by Texas, Germany claims moving the gold could have a significant impact on the future pricing and viability of gold. Much of this comes from the fact that the American dollar is only worth approximately one-sixth of what it was back when George W. Bush first took office.
Critics have quite a bit to say about Texas’ plans to bring home its gold. One of the main criticisms comes down to the fact that it would likely be a very costly venture to move the gold back to the Lone Star State, especially given the fact that an adequate facility would have to be built in order to house the bullion.
While the facility itself wouldn’t need to be overly huge, the amount of money it would cost to properly protect the gold would almost surely be staggering.
Safety is another huge issue. The Federal Reserve bank in New York features the world’s most state of the art protection protocols, making the chances of a heist effectively close to zero. By moving a billion dollars’ worth of gold to a new facility in Texas, the state would be taking a massive risk.
The tried and true system that keeps the gold protected at the moment would practically be thrown out the window, and the state would have to rely on what could potentially be nothing short of an experiment in order to keep its gold under lock and key.
Another concern comes down to the fact that Texas could potentially try once again to secede from the country down the road, which many worry is the main reason behind the state’s push to reclaim its gold. According to The Week, a petition asking the White House to allow the state to secede was signed earlier in the year, raising fears that the state may someday try to go back to an independent republic. If this were to occur, Texas could “take the money and run” if it had its gold sitting on its own soil.
Gold has very much been in the news as of late. With the financial crisis in Cyprus bringing the concept of smart investing back into the minds of people throughout the world, many are looking to the precious metal as a form of security against a national or international financial crisis on the level being experienced in Cyprus (or even worse).
Historically, people have invested in gold in order to free themselves from being affected by problems such as this, although modern day principles make this concept seem a bit outdated. There will always be problems with the establishment, however, which means there will always be people (and perhaps even state entities) that are looking to keep as tight a grip on their gold and investments as possible.
By Erik Neilson
Thursday, March 28th, 2013 – Wealth Daily