Secession Coming? Texas Pulls Gold!
Writing’s On The Wall: Texas Pulls $1 Billion In Gold From NY Fed
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The lack of faith in central bank trustworthiness is spreading. First Germany, then Holland, and Austria, and now – as we noted was possible previously – Texas has enacted a Bill to repatriate $1 billion of gold from The NY Fed’s vaults to a newly established state gold bullion depository…”People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold,” and the Bill includes a section to prevent forced seizure from the Federal Government.
From 2011:
“The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.”
The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.
“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
And now, after we noted the possibility previously, as The Epoch Times reports, Texas Governor Greg Abbott signed a bill into law on Friday, June 12, that will allow Texas to build a gold and silver bullion depository. In addition, Texas will repatriate $1 billion worth of bullion from the Federal Reserve in New York to the new facility once completed.
On the surface the bill looks rather innocent, but its implications are far reaching. HB 483, “relating to the establishment and administration of a state bullion depository” to store gold and silver coins, was introduced by state Rep. Giovanni Capriglione.
Capriglione told the Star-Telegram:
“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, this is exactly where they would want to go with their gold.”
But isn’t New York, where most of the world’s gold is stored, also big and powerful? Why does the state of Texas want to go through the trouble of building its own storage facility?
There are precisely two important reasons. One involves distrust in the current storage system. The second threatens the paper money system as a whole.
“In a lot of cases with gold you may not have clear title to the metal. You may have a counterparty relationship that makes you a creditor. If the counterparty has a problem unrelated to gold, they can default and then you become an unsecured creditor in bankruptcy,” said Keith Weiner, president of the Gold Standard Institute.
This means you get whatever is left after liquidation, often just a fraction of the initial value of your holdings.
“This exact scenario happened with futures broker MF Global. I knew people who had warehouse receipts to gold bars with a specific serial number. But that gold had an encumbered title and they became unsecured creditors in bankruptcy,” said Weiner.
In Texas, two big public pension funds from the University of Texas (UoT) and the Teacher Retirement System (TRS) own gold worth more than $1 billion.
Being uncomfortable with holding purely financial gold in the form of futures and Exchange-traded Funds, University of Texas actually took delivery of the gold bars in 2011 and warehoused it with HSBC Bank in New York.
At the time pension fund board member and hedge fund manager Kyle Bass explained: “As a fiduciary, which I am in that position to the extent you own gold and you are going for a long time, and it’s not a trade. … We looked at the COMEX at the time and they had about $80 billion of open interest between futures and futures options. And in the warehouse they had $2.7 billion of deliverables. We are going to own it a long time. You are on the board, you are a fiduciary, so that’s an easy one, you go get it.”
Bass is implying that there is much more financial gold out there than physical, and that it is prudent to actually hold the physical.
Taking the gold to Texas would then also solve the counterparty risk. “In this case it’s going to be a depository, the gold is going to be there, they are not going to be able to lend it out and it won’t serve as collateral for other transactions of the bank.” said Victor Sperandeo of trading firm EAM Partners. “Because if the bank closes, you are screwed.”
“I think that somebody was looking at that, we better have this under our complete control,” said constitutional lawyer and gold expert Edwin Vieira, of the Texas bill. “They don’t want to have the gold in some bank somewhere and in two to five years it turns out not to be there.”
So far most of the attention has focused on the part of the depository and the big institutions. However, the bill also includes a provision to prevent seizure, which is important for private parties who want to avoid another 1933 style confiscation of their bullion by Federal authorities.
Section A2116.023 of the bill states: “A purported confiscation, requisition, seizure, or other attempt to control the ownership … is void ab initio and of no force or effect.” Effectively, the state of Texas will protect any gold stored in the depository from the federal government.
And free from the threat of confiscation, private citizens can use gold and silver as money, completely bypassing the paper money system.
“People can legally do that with gold contracts. The difficulty is the implementation. Now Texas has set up a mechanism with the depository. We have accounts in that institution and can easily transfer back and forth certain amounts. So we can run our money system a gold or silver basis if we were so inclined,” said Vieira.
This would not be possible if the gold is stored in a bank because of the risks of bank holidays and bankruptcies. It would also not be possible if the federal government could confiscate gold.
According to Vieira, this anti-seizure provision rests on Article 1, section 10 of the Constitution of the United States, which obliges the States to not make anything tender in payment of debts apart from gold and silver coin.
“If someone from the Department of Justice comes along you are going to see legal and political fireworks. The state is going to say ‘we need to have a mechanism to make gold and silver money. This is pursuant to the constitutional provision we have. You can’t touch this. Our state power on the constitutional level is more powerful than any statute you may pass,’” said Vieira.
Because one of the litigant parties is a state, the case would go directly to the Supreme Court.
“We are talking about something completely new in terms of the legal playing field. This is no longer a fringe concept,” he adds, but cautions about a possible fight with the federal government: “We will have to see how committed the governor and the attorney general are.”
Official Statement from Governor Abbott:
Governor Greg Abbott today signed House Bill 483 (Capriglione, R-Southlake; Kolkhorst, R-Brenham) to establish a state gold bullion depository administered by the Office of the Comptroller. The law will repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas. The bullion depository will serve as the custodian, guardian and administrator of bullion that may be transferred to or otherwise acquired by the State of Texas. Governor Abbott issued the following statement:
“Today I signed HB 483 to provide a secure facility for the State of Texas, state agencies and Texas citizens to store gold bullion and other precious metals. With the passage of this bill, 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.”
* * *
Is this the first step down a road to secession? Notably, they’ll need that gold to establish their own country once they win the potentially imminent war with the US military which starts on Monday (Jade Helm).
Related:
http://tradcatknight.blogspot.com/2014/11/economist-financial-collapse-will-cause.html
http://tradcatknight.blogspot.com/2015/06/economic-crash-watch-literally-your-atm.html
http://tradcatknight.blogspot.com/2014/12/on-brink-of-war-and-economic-collapse.html
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i get why ALL states may want to secede, but i think it’s
part of the plan to break up, weaken and destabilize america. they’ve done it in every other conquered nation.
look at iraq, for example, or poor libya.
a strong nation is not divided against itself. stay and fight, texas!
QUOTE: “The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is
“Storing the bars in a New York Vault” { at the Federal Reserve Corporation }
GET OFF THE INTERNET!
Secession, when hell freezes over. What a joke…
Texas is officially the most corrupt state in the republic, for which it stands, one nation under God.
Most corrupt? You better look closer to home. Texas will not succeed because we are the only state who makes jobs and we are keeping this ship of fools afloat. 200-300 people from other states move to Houston alone every day to escape jobless conditions. Soon, you too will move here and you will be a Texan too. We do not require federal assistance, the rest of the U.S. will soon need assistance from the state of Texas. Obama has done everything he can to put Texas in the same financial position as the rest of the states to no avail. If the next president is smart, they would do well to use Texas as a template for success for the rest of the nation. Look at the democratic cities that have been run by democrats for the last 30 years like Detroit and Cleveland. They are wastelands due to union and political corruption……it’s not working……and neither are the people. We are the only state that is giving Obama the finger, we have stopped his amnesty with our courts and judges and we defend our border to keep you from being overrun by illegals, so have a little respect when you speak of things that you have no idea what you are talking about.
TeXas most corrupt, MY ASS. New York, Illinois, California. All three bankrupt. they just won’t admit it. RAHM the JEW Emanuel is just barely keep CHICAGO out of Bankruptcy court, California has not enough water for a cup of coffee, New York capitol of corruption.
“Texas is officially the most corrupt state in the republic”…Right under New Jersey…..
Well….they just dragged the President of the United States through a nasty court battle, then suffered a serious weather disaster.
They can’t expect him to send disaster relief aid NOW, can they? So they’re having to use their own ‘real’ assets.
It’s Bad when the Banks are so High Minded and self centered they won’t even loan to their own state for disaster relief……And to TEXAS…..it’s not like their not GOOD for the money.
We don’t need the Fed’s “help”, they did nothing for us during Ike. The Obomber well deserves every slap in the face he gets.
DON’T MESS WITH TEXAS!
Can anyone answer this? How is it TEXAS can pull 1 Billion Dollars in Gold But Germany has to wait until 2020 to get their Gold Back?
One word – Nurenburg.
I for one would go down there with my family to protect freedom. The masses still don’t see the enemy within our own nation.
Interesting story
/blogging-citizen-journalism/2015/06/35-train-derailments-since-march-30-2015-2512408.html
This is great for Texas….but I would expect the junkyard dogs that work for Obama and the Federal reserve will be visiting soon with a big false flag…………maybe that EMP attack we keep hearing about
This is the reason for Jade Helm . The peasants (ie, the states) are revolting.
If you go to the capital at Austin, and look at the seal set in the floor of the rotunda, it reads: “Republic of Texas”, not “State of Texas”.