Gold Fort Knox for Texas advances as Tennessee lawmakers back similar plan
While Barclays is pulling out of the precious-metals business and Deutsche Bank is reportedly still trying to unload its London vault, China is capitalizing on these opportunities. But its not just China expanding its focus on precious metals. Lets look closer to home.
After passing a law to establish an in-state bullion depository and recall its gold held in HSBCs New York vault, the state of Texas is now fielding its first proposals for the construction of its own Fort Knox. One firm just pitched a plan for a $20 million structure to be built 250 miles south of Fort Worth with no tax dollars.
A new type of currency possible: Storage of the states roughly $650 million worth of gold costs about $650,000 a year to safeguard in New York. The Texas-storage plan would save on those costs while also offering several other serious advantages: At the depository, Texans will be able to open accounts similar to checking or savings accounts at traditional banks and monitor them online, the Star-Telegram reported. The depositors fees would go to the state.
But thats not all: Existence of the depository opens up the possibilities for users creating a new type of currency in which purchases are made electronically with the backing of the gold in the depository, wrote Ryan McMaken of The Mises Institute. In other words, one could potentially use the depositorys infrastructure to make purchases using gold, and to have gold either directly deposited into anothers account, or converted to U.S. dollarsand deposited in a conventional bank. Arguably, this is just anelectronic version of gold-backed money.
Fear of financial crisis spurs Tennessee: And other states are now taking steps to emulate the Texas plan. Tennessees legislature just passed a joint resolution supporting the establishment of its own official state bullion depository.
The resolution acknowledges that because of our evolving and unpredictable national economy, there is an effort to achieve increased monetary stability and liquidity and greater financial security in the event of a national or international financial crisis.
Therefore, in response to the state of our national economy, individuals and entities have purchased gold and other precious metals in the form of bullion and coins in order to achieve the desired financial security and stability, it reads.
These metals deserve security and safekeeping for their utilization as investments in the event of an economic crisis. The states solution is to build a facility like Texas is now planning.
First step toward gold, silver as money: Tennessees resolution is setting the stage for the creation of a state bullion depository, an important first step toward establishing gold and silver as money in the state, noted the 10th Amendment Centers communications director, Mike Maharrey. As the next step, a bill to establish a depository should be introduced and passed during the next legislative session, he added. There appears to be no barriers to getting this done. Now its up to activists in Tennessee to keep the pressure on and ensure the legislators and governor follow through.
Challenging the Feds monopoly: The Tennessee depository also would help undermine the monopoly the Federal Reserve System by introducing competition into the monetary system.
And lessening the Feds dominance of the monetary system is crucial, given that one of its top officials, New York Fed President William Dudley, recently expressed his approval of the dollar potentially losing its global reserve-currency status in the future.
Anticipating the day that the dollar is no longer king, China is working hard to corner the market on physical precious metals through actions like buying the Barclays vault. And now some American states are starting to wake up and smell the coffee for themselves hence these proactive steps by Texas and Tennessee, certainly worthy of emulation by individual investors.