ZeroHedge.com reports in “Texas Pulls $1 Billion In Gold From NY Fed, Makes It ‘Non-Confiscatable’,” that on Friday, June 12th,
“Texas Governor Greg Abbott signed a bill into law that will allow Texas to build a gold and silver bullion depository.
“The lack of faith in central bank trustworthiness is spreading. First Germany, then Holland, and Austria, and now . . . Texas has enacted a Bill to repatriate $1 billion of gold from the NY Fed’s vaults to a newly established Texas state gold bullion depository . . . . the Bill includes a section to prevent forced seizure from the Federal Government.”
“HB 483 was introduced by state Rep. Giovanni Capriglione who said,
“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, Texas is exactly where they would want to go with their gold.”
Given the choice of storing your gold in Switzerland, Hong Kong, Singapore, Canada—or Texas—where would you rather store your gold? A lot of people would say “Texas”. Not just Texans, not just people in the US, but lots of people around the world would rather store their gold in Texas.
After all, how many of those foreign gold depositories would fight—fight—confiscation by the US government? Texas might.
Once the Texas Gold Bullion Depository is operational (within a year?), so many people from around the United States and from around the world will choose Texas as the place to store their gold that multitude of gold-based businesses and markets might spring up in the vicinity of the nascent Texas Depository.
It’s even conceivable that the Texas Gold Depository might eventually give the Shanghai Gold Exchange (SGE) a run for #1 position as the physical gold market. Not right away, of course; the Texas gold depository’s initial $1 billion in gold (25 tons) is no match for the 50 tons per week that are already being traded on the SGE.
On the other hand, China’s reputation for honesty and stability is no match for that of Texas.
I won’t say that the Texas Gold Depository is the cornerstone that will allow Texas to ultimately compete with the SGE.
But it might.
• Since World War II, nations and institutions from around the world preferred to store their gold in the Federal Reserve vaults in New York City because it was unlikely to be invaded. The world had confidence in the safety and prudent operation of the Federal Reserve.
However, the United States and Federal Reserve haven’t publicly audited their gold treasury since A.D. 1953. The Fed refuses to allow an independent, public audit. That refusal has raised suspicions that the US government and Federal Reserve have been secretly selling off both US and foreign-owned gold in order to suppress the price of gold and maintain the apparent value of the fiat dollars. These suspicions have diminished public trust in the safety and responsibility of the Federal Reserve’s gold storage program.
(Incidentally, the new law creating the Texas Depository mandates that—unlike the Federal Reserve and Fort Knox, which haven’t been inventoried in over sixty years—the entire Texas Depository must be inventoried annually and the result must be made public.)
• Since WWII, Germany has piled roughly 1,500 tons of gold into NY Fed’s vaults and another 374 tons in French vaults. Reason? During the Cold War, Germany feared that the Soviet Union would invade and steal Germany’s gold.
However, after the Soviet Union died in A.D. 1991, the Cold War died with it. No longer threatened by Communist invasion, Germany began to consider repatriating some of its gold. Other nations followed suit.
In A.D. 2012, Germany asked for the return of 300 of the 1,500 tons of its gold stored in the Federal Reserve. The Federal Reserve explained that the repatriation of 300 tons to Germany would take seven years.
The Fed claimed to hold 6,720 tons of gold in its NY vaults. 300 tons is just 4.5% of that total tonnage. How could it take seven years to repatriate just 300 tons to Germany? How could it even take seven months?
For years, there’ve been rumors that the US and/or Federal Reserve had secretly leased or even sold the gold they claimed to hold in their vaults to gold banks which then sold that gold into markets. The rumored objective was to increase the apparent supply of gold in order to suppress the price of gold and thereby artificially support the apparent value for the fiat dollar.
The Fed’s inability to repatriate a mere 300 tons of gold to Germany supported the rumors that the Fed’s gold was gone.
Today, the issue of how much gold remains in US and Fed vaults is seldom in the news. But it’s a common belief that the US government and Federal Reserve have secretly sold off so much of their gold, that their vaults are nearly empty.
That’s why they won’t allow a public audit. A public audit would reveal that the vaults are bare. If the vaults were shown to be bare, the apparent supply of gold might be reduced by ten thousand tons or more. The price of gold would jump and the purchasing power of fiat dollars would fall.
My objective in this stroll down memory lane is to illustrate that there’s legitimate reason to distrust the US government’s and Federal Reserve’s ability to store gold: several thousand tons may be missing.
To prove my point, answer this: Suppose you had some quantity of gold that you wanted to store; suppose it was possible for you store your gold with the Federal Reserve and/or US Treasury—would you do it? Would you trust the Federal Reserve and/or federal government to store your bullion, collectible gold coins, and rolls of silver eagles?
Think about that. Would you trust the Fed or the feds to store your gold and silver? Do you know anyone who would?
The Fed and the feds inspire so much distrust that it’s hard to imagine any private person trusting them to store their gold.
• Which brings me back to Texas.
What if Texas had a gold bullion depository and you could store your gold in that depository, might you trust Texas to store your gold?
Truthfully, you should be wary of any entity that offers to store your gold. But, at minimum, if you had so much gold that you couldn’t just bury it in the back yard and you had to store it someplace, would you be more inclined to trust the New York Federal Reserve, or the Texas Gold Bullion Depository?
For me, the question’s silly because the answer’s obvious.
In fact, when I consider storing gold in the Texas Gold Bullion Depository, I find my mind’s eye viewing an image of the Lone Ranger riding a galloping White Horse, and shooting his six-gun to the sound of the William Tell Overture. It’s a silly image, but there it is.
I don’t trust any government. It’s un-American to trust governments. But if I had a mass of gold to store, who would I trust more than a Texas Gold Bullion Depository? Switzerland? Hong Kong? Canada? Singapore? The New York Federal Reserve?!! Ha!
So long as my imagination keeps producing images of the Lone Ranger and sounds of the William Tell Overture, I’ll keep my gold within The State of Texas.
Some readers are probably saying that Adask has finally flipped out. It was bound to happen, sooner or later. Now, you mention the “Texas Gold Bullion Depository,” and he sees the Lone Ranger. Those readers might be right.
Mental Illness is Contagious
Texas Governor Greg Abbott is also regarded by some as a nut. When the feds announced that they’d be conducting the two-month military exercise called “Jade Helm” in several States (including Texas), Governor Abbott ordered the Texas State Guard to monitor the US military involved in Jade Helm. The Governor of Texas doesn’t trust the federal government.
A bunch of people reacted by sending Governor Abbott tin foil hats. They think Abbott’s reaction to Jade Helm is evidence that extremist conspiracy theories and paranoia have taken root in Abbott’s mind.
I disagree. Although I don’t expect much that’s sinister to emerge from Jade Helm immediately, I see Abbott’s willingness to monitor and figuratively “stand up against” the US military as evidence that Texas doesn’t trust the feds. I think that’s a good thing. I think that’s a great thing.
More, the decision to build a Texas Gold Bullion Depository is even greater evidence that Texas doesn’t trust the feds or the Federal Reserve to store and protect Texas gold. I think that’s another great thing and giant step toward a possible restoration of liberty in the Lone Star State.
So long as Texas is inclined to stand up against the feds and the Federal Reserve, I’m rooting for Texas. You can call me “Tonto” if you like (and I know what the word means in Spanish), but I’m ready to ride with the “Lone Ranger”. If Rachel Dolezal can self-identify as a black, then I can self-identify as a “faithful Injun companion,” Kimosabe.
Get yourself a horse (or maybe a copy of the Constitution) and you can self-identify, too.
• Did you know that there are three electrical grids in the continental United States? There’s an Eastern grid, a Western grid, and a Texas grid. Texas is the only state that, pretty much, has its own electrical grid. Texas is the only state that’s energy independent. Texas is the only state that could theoretically secede and easily become its own nation.
Did you know that if Texas were an independent nation, the Texas GDP ($1.5 trillion) would rank about # 12 among the nations of the world—a little lower than Canada ($1.8 trillion) and a little higher than Australia ($1.4 trillion)?
Did you know that the new Texas Gold Bullion Depository Law will allow private people to not merely store their gold and silver into the forthcoming depository, but also to establish private accounts whereby they can buy and sell with gold and silver?
Do you understand that, under the new law, those who hold accounts in the Texas Gold Bullion Depository will be able buy and sell by means of both paper checks and digital (internet) transfers?
I.e., suppose I have a Depository account holding, say, 50 ounces of gold and you also have another Depository account. So long as we both had Depository accounts, I could buy your used car for 10 ounces of gold and pay you with a check or debit card that would cause 10 ounce of gold to be debited from my 50 ounces in my Depository account and transferred into your Depository account.
We could buy or sell with gold or silver!
How many people do you suppose there are in Texas, the United States, or even the world—who’d like to have a bank account that would allow them to buy or sell in terms of gold and silver? How big do you suppose the Texas Gold Bullion Depository could grow if it provided a basis for commerce denominated in gold, silver or other precious metals? How fast could it grow?
Do you understand that if Texas can buy and sell with gold and silver, Texas will have established a gold- and silver-based monetary system to compete with and ultimately rival the Federal Reserve’s fiat dollars?
But will the establishment of a constitutional monetary system be allowed?
History suggests that the banking system is prepared to support fiat currency with acts of violence.
Do you recall that Saddam Hussein announced plans to start selling Iraqi crude for euros in A.D. 2000? Do you understand that by selling Iraqi crude for euros, Hussein threatened the fiat dollar’s primacy as the world’s only “petro-currency”? Do you recall that the US government invaded Iraq in early A.D. 2003 under the pretext of searching for “Weapons of Mass Destruction” that were never found and apparently never existed? Do you suspect that the real reason for that invasion was to punish and destroy Iraq and Saddam Hussein for daring to sell Iraqi crude for euros and thereby threaten the US “petro-dollars”? Do you suspect that the real reason for the A.D. 2003 invasion was to protect the fiat dollar from the decline in value that would follow if it lost its stature as world’s only “petro-currency”?
What about Colonel Muammar Gaddafi? He led Libya from A.D. 1969 through A.D. 2011. During his 42-year reign, he raised Libya up from the poorest country in Africa to the richest. Nobody minded. Nobody much cared. He was accused of responsibility for the A.D. 1988 bombing of Pan Am Flight 103 that crashed at Lockerbie, Scotland, killing 243 people. Later, the US bombed Libya but not much resulted from that attack.
However, do you recall that shortly after Gaddafi proposed a pan-African currency backed by gold, his nation was suddenly besieged by an alleged “civil war” and attacked by the US and western allies? Do you remember that that attack caused the A.D. 2011 destruction of Libya and Gaddafi’s assassination?
Some believe that the real reason for the assassination of President John F. Kennedy was his alleged decision to stop issuing Federal Reserve Notes (FRNs) and instead use a paper currency issued by the US Treasury.
My point is that the life expectancy of those who threaten the survival of the fiat dollar can be short.
I’d bet that Texas Governor Abbott is aware of those reports and conspiracy theories. Insofar as he’s helped implement the Texas Gold Bullion Depository Act and thereby threatened the legitimacy and value of FRNs, it’s not surprising that Governor Abbott might be a teensy bit paranoid. If I were in his office, and Jade Helm was coming to my State, I’d also have the Texas State Guard spying on the Jade Helm military. An ounce of paranoid prevention is worth a team of top-notch surgeons.
Another Conspiracy Theory?
If you like conspiracy theories, here (as Rod Serling might’ve said) is “another for your consideration”:
What if Governor Abbott isn’t really opposing the federal government but is instead, cooperating with it?
What if the federal government really wants the Texas Gold Bullion Depository?
Of course, that idea sounds crazy.
But it’s only crazy so long as the federal government is determined to protect and preserve the fiat dollar.
What if the federal government has been finally forced to admit privately that the dollar’s sure to die within, say, one to three years?
Would the feds simply allow the dollar to die, chaos follow, and nation disintegrate before they created a new alternative currency?
Or . . . would the feds try to lay the foundation for an alternative monetary now—before the dollar died—so people would have an alternative currency that they understood and was readily available when the FRN breathed its last?
For example, what if Texas reestablished a constitutional monetary system based on gold and silver? If the Texas system worked well and worked quickly—and if the governor wasn’t shot in the head by a “lone gunman”—other States might quickly follow suit.
It’s unlikely, but it’s at least possible that transitions in Texas and other states from FRNs to gold and silver might be sufficiently smooth to minimize a lot of the chaos and political unrest that could otherwise follow the FRN’s demise.
No matter what, if (when) the fiat dollar dies, there’ll be trouble. But will it be “trouble” of the sort that follows when there’s an already established gold- and silver-based monetary alternative? Or will it be “big trouble” of the sort that follows when one currency dies and there’s no readily available alternative?
• Article 1 Section 10 Clause 1 of the Constitution mandates that, “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.” Regardless of whichever conspiracy theories turn out to be true or false, it appears that that constitutional money (gold & silver coin) may soon make a comeback right here within The State of Texas.
I’ve advocated a return to constitutional money for most of 20 years. I’ve lived to some significant steps in that direction.
I can’t tell you how excited, pleased and proud I am.
• Jade Helm is taking place within seven southwestern States.
Three of those states are identified as “permissive” which means that they’re presumed “friendly” to the federal government in the context of the Jade Helm exercises. Those three “permissive” states are California, Nevada and Colorado. (Booooo!)
One state, Arizona is colored “light blue”—meaning that their political slant is uncertain but tending to be “friendly” to the federal government. (Boo!)
One other state, New Mexico, is colored brown and is identified as having an uncertain political slant but is probably “leaning hostile” to the federal government. (Yay!)
Only two states, Utah and Texas, are colored red and identified as “Hostile” to the Jade Helm warriors and federal government. (YAAAAAAY!!!!)
The southern-most tip of the permissive state California is also colored red (“Hostile” to the feds). Yay.
But I’m ignoring southern California to focus only on the two complete states described by Jade Helm as “Hostile”: Utah and Texas.
• You might be interested to learn that Utah and Texas have something in common:
In A.D. 2010 Utah passed a law to become the first modern state to legalize and recognize gold and silver coin as money within that State. In doing so, Utah fired a shot across the Federal Reserve’s bow and directly threatened the almighty FRN.
Now, in A.D. 2015, Texas passed a law to become the first modern state to establish a gold bullion depository able to have private accounts for people wishing to buy or sell with gold and silver coin or bullion. In doing so, Texas has fired a powerful shot across the Federal Reserve’s bow and directly threatened the almighty FRN.
And now, the US government is hosting a seven-state military exercise that describes only two of the seven states as “Hostile”: Utah and Texas.
Interesting coincidence, hmm?
In light of this coincidence, I suggest that until August 15th (when Jade Helm is supposed to end), the governors of Utah and Texas spend most of their time indoors away from windows and, whatever they do, stay the hell away from grassy knolls.
• Confidence in the fiat dollar and the Federal Reserve is waning. As it does, the dollar will tend to die and people with gold to store will tend to look for depositories they can trust. I doubt that many depositories will inspire more trust than the coming Texas Gold Bullion Depository. The establishment of that Depository is a big story and, one way or another, it’s going to make a big difference.