“What are ‘dollars’ made of?” “Paper, your kingship.” “Paper!” replied the king incredulously, “You mean [Americans] prefer paper to gold and silver?” So goes the exchange between Minister of Justice Gorkey and King Igor II in the wonderful book The Kingdom of Moltz. Americans preferred paper over gold in 1980, when Irwin Schiff wrote his book. However, by 2015 Texans’ preference for gold became evident when the Texas state legislature created the Texas Bullion Depository, the first state-administered bullion depository to be established in the United States. Last week Texas Comptroller Glenn Hegar announced that his office had picked Austin-based Lone Star Tangible Assets to build and operate the first state-administered gold depository in the country and that it could open as early as January. Why did the legislature create the depository?
Texas Owns Gold
The University of Texas Investment Management Company’s gold endowment, worth an estimated $660 million, is currently stored in HSBC’s New York bank vault. This costs Texans a hefty sum each year. When Texas Rep. Giovanni Capriglione introduced HB 483 at the opening of the 84th session of the state legislature in 2015, Governor Greg Abbott stated that one of the main purposes of this bill was to bring Texas gold back to Texas. Furthermore, Rep. Capriglione explained that the depository would “give Texas the opportunity to become a commodities hub for the continent.” Costing Texas taxpayers nothing because it is privately funded, the depository moves the state toward financial independence.
Diminishing Texas Dependence
The TexasDepository.com, the depository’s official website, underscored this point in their article “The Texas Depository is a Golden Opportunity.” Enumerating the reasons why the depository is about value and not need, the authors write:
Third, even though Texas has grown to become the 12th largest economy in the world (if measured as its own country), and has been largely insulated from worldwide economic volatility, who can be naïve about the growing political risk in the world and the vulnerability of global financial markets?
Our national debt is approaching $20 trillion dollars. On “Meet the Press” in 2011, former Fed Chairman Alan Greenspan explained that, “the United States can pay any debt it has because we can always print money to do that.” Is there any Texan reassured by that thesis? We are not far removed from the financial crisis of 2008 that crippled the nation and brought us to within three days of a meltdown of the entire banking system.
It should not be lost on anyone that a bullion reserve, headquartered in Texas, adds a layer of diversification and security to one of the world’s largest economies. Every sovereign nation and major central bank stores gold. Few people understand—or even ask the question—why.
Clearly the authors recognize the value of the depository includes financially insulating ourselves from the United States, drawing a powerful comparison to sovereign nations and central banks.
National Sovereignty Requires Monetary Sovereignty
As noted investment broker Peter Schiff wrote on May 8, “Last week, the Texas House unanimously passed a bill that would facilitate the establishment and operation of the Texas Bullion Depository; helping to undermine the Federal Reserve’s monopoly on money. The creation of a state gold depository in Texas represents a power shift away from the federal government to the state, and it provides a blueprint that could ultimately end the Fed.” The Texas Nationalist Movement applauds our legislature for its foresight in creating the Texas Bullion Depository, and seeing it through to completion. Our sovereignty depends upon it.