New Gold Electronic Payments System To Protect From “National Financial Or Currency Crisis”

GoldCore's picture

Gold Bullion Worth $1 Billion To Be “Repatriated” From NY Fed To New Texas Bullion Depository

- Texas creates state gold depository – bringing gold home from New York Fed
- Move to remove gold from Federal Reserve highlights distrust
- Follows repatriation moves by Germany, Netherlands, Austria and others
- Legislation will prevent Federal government from confiscating gold
- Includes provisions that may lead to return to using gold as currency in the U.S.
- New gold electronic payments system protect from “national financial or currency crisis”
- European, UK and Irish governments could learn from prudent monetary move

The state of Texas has just passed legislation to build its own gold bullion depository, to repatriate $1 billion dollars worth of gold currently stored by the Federal Reserve in New York and to create a new gold electronic payments system to protect from “national financial or currency crisis”.

New York Federal Reserve Employees Auditing Gold?

New York Federal Reserve Employees Auditing Gold?

The move is being widely perceived as a vote of no confidence in the privately owned, bank owned central bank and the federal government.

Governor Abbott said that establishing this Depository means Texas will be, “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.” (see Governor Abbott Signs Legislation To Establish State Bullion Depository )

The law will go into effect immediately and the new Texas Bullion Depository – soon to be  built- will cater to businesses, state agencies and citizens.

Representative Giovanni Capriglione who introduced the bill was reported by the Star-Telegram as saying:

“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,” leading some commentators to puzzle over whether New York was not “big and powerful”.

Heretofore, it has been Venezuela and European countries that have beenrepatriating gold – Germany, the Netherlands and Austria have sought to bring their sovereign gold home from New York amid fears that the Fed – whose gold stocks have not been publicly audited since 1953 – may not be in possession of the gold it claims to hold.

It is highly significant therefore that a powerful state from within the U.S., such as Texas, should display such apparent distrust of the Federal Reserve.

Two of Texas’ largest public pension funds from the University of Texas (UoT) and the Teacher Retirement System (TRS) showed similar concerns in 2011 when they took delivery of $1 billion worth of gold bars out of storage with HSBC in New York.

The asset had been held in an ETF but the pension funds were apparently uneasy about not actually owning the physical gold. ETFs track the price of gold and ETF speculators or investors are merely creditors of the ETF and therefore, are very vulnerable to counter-party risk and exposure to the many banks, who are custodians and indeed sub custodians.

The legislation even seeks to protect the state’s gold from confiscation by the Federal government. 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.”

Under the Tenth Amendment the rights of the state trumps any order from the federal government.

Also significant is a provision which may lead to a return to sound money as proposed by Article 1, section 10 the constitution, i.e. gold and silver. In one section the bill states: “depository account holder may transfer any portion of the balance of the holder’s depository account by check, draft, or digital electronic instruction to another depository account holder or [to a person who at the time the transfer is initiated is not a depository account holder.]” [underline]

The man who initially drafted this legislation is Rick Cunningham of the Texas Center for Economics, Law, and Policy.  Mr. Cunningham is respected and is the Executive Director of the Center, but he is also a magna cum laude graduate of Texas A&M with a degree in Economics, as well as a graduate of the University of Chicago Law School, where he served as associate editor of the Law Review journal.

According to Mr. Cunningham

“this proposal consists of two parts – the “depository” part and the “system” part.  The “depository” part … provides simply for hedging the state’s investment risk by allocating a recommended portion of state and local investment assets to physical gold and other precious metals, and housing those metals in a state-operated facility…”

“But the truly game-changing aspect of this proposal … lies in the “system” part.  This would be an advanced, state-owned and operated system of electronic payments and settlements, denominated in ounces of precious metals, barred from engaging in lending, leasing, speculative or derivative transactions, and always maintaining a 100% ratio of bullion reserves to account balances.  At full scale, not only could it sustain state and local government operations, it could potentially sustain large swaths of the Texas economy, even in the face of a national financial or currency crisis.

If gold and silver were to become widely circulating currencies in Texas, the Federal Reserve issued and continuously devaluing dollar may slowly fall out of favour. Not maintaining a currency monopoly could ultimately lead to a return to using gold and silver as currency in the U.S.

In the coming months and years it is likely that the Federal Reserve and the Federal government of the U.S. will come under increasing pressure from Russia and China to back the dollar with something of intrinsic value rather than simply increasingly empty promises.


If either of those two countries chose to back their currencies with gold bullion, of which they have been accumulating vast volumes in recent years, the U.S. would be forced to follow suit in order to prevent sharp falls in the value of the dollar and in an attempt to preserve reserve currency status.

Now, it would seem, the Federal Reserve note – the dollar bill as issued by a private central bank in defiance of the Constitution – may face pressure from within the U.S. as ‘Lone Star’ state Texas begins to bring gold back into the monetary system.

The days of paper and electronic currencies – backed by little more than faith in governments that the public increasingly do not trust – are numbered. Texas is preparing for this as are European nations such as Germany, Austria and the Netherlands.

Preserve your wealth by acquiring an allocation to history’s only enduring money – gold.

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Today’s AM LBMA Gold Price was USD 1,182.10, EUR 1,050.06 and GBP 759.36 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,178.25, EUR 1,049.57  and GBP 760.01 per ounce.

Gold climbed $5.20 or 0.44 percent yesterday to $1,186.20 an ounce. Silver rose $0.17 or 1.07 percent to $16.11 an ounce.

Gold in USD - 1 Week

Gold in USD – 1 Week

Gold in Singapore for immediate delivery was marginally lower at $1,185.6 an ounce towards the end of the day,  while bullion in Switzerland fell a dollar.

Gold inched down this morning but stayed in lock down in a very narrow range. The yellow metal looks well supported at these levels with safe haven bids increasing due to the unresolved Greek debt crises as the time runs out before the deadline at the end of the month.

Some investors wait for more guidance from the U.S. Federal Reserve during its meeting that begins today. Fed Chair Jane Yellen’s comments and wording of the Fed policy statement tomorrow will be closely watched.

U.S. economic data is still weak.  Yesterday’s data from industrial production was poor underlining concerns about the U.S. economy.

The Bank of China has joined the ICE Benchmark Administration (IBA) gold price benchmarking process.  This increases the number of participants to eight including – JPMorgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs in the LBMA Gold Price, which formally replaced the London Gold Fix this spring.

In late morning European trading gold is down 0.16 percent at $1,184.87 an ounce. Silver is off 0.38 percent at $16.01 an ounce and platinum is also down 0.15 percent at $1,086.56 an ounce.

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lasvegaspersona's picture

I'd trust the state of Texas just like I would Jack Lew.

Sorry, I'll take care of my own gold ....thank you.

scv's picture


Goes to show how unsure and idiotic society has become.

Creating an electronic system for a crisis when there is no electricity sounds like the dumbest fucking thing I have ever heard. Checking on the price of gold from the bunker as you melt down the gold into bullets.



draego's picture

Would love to see a TEXAS 1oz gold coin to rival gold eagles.

kchrisc's picture

Operation Texas Freedom in 3..2..

Liberty is a demand. Tyranny is submission..

Mat Cauthon's picture

Just published an interesting 'under the radar' event.  First the IMF is over in Beijing to bring the Yuan into the SDR, and now this from the London Gold Fix committee.

'Finbarr Hutcheson, president of the ICE benchmark administration, said in a statement: "We are delighted to welcome Bank of China to the gold auction.'



Dovie'andi se tovya sagain (It's time to toss the dice)

Got Karatbars?

Pliskin's picture

By the end of the year China are gonna reveal their gold holdings and say

"There you are U.S.A that's what we've got, now let's have a look at yours."

It'll be like Ron Jeremy and Bruce Jenner having a dick waving competition.

Pliskin's picture

Maybe Texas plans on buying a billion dollars worth of Bitcoins !

Now THAT'S where the sensible money is.


marathonman's picture

$1 Billion ain't chump change, but at current prices its still only 52,000 pounds.  26 tons (US).  Out of a reported 8000 ton hoard at the Fed.  Not sure what difference it would make in the greater scheme of things but I like the direction.

Pancho de Villa's picture
Pancho de Villa (not verified) marathonman Jun 16, 2015 2:17 PM

Senor, you are not implying that 26 Tonnes de Oro is just "chump change", are you?

aqualech's picture

they will get delivery, wait and see

HenryHall's picture

I wonder whether the bookmakers are on to this?

26 tonnes of gold metal to Texas before 1/1/2016 or not?

I guess the Fed will be buying some on the open market to fill the request.

lasvegaspersona's picture

There is stil just over 700 tons at GLD (though it has started dropping it's inventory again.)

Banks (the right banks) can buy shares and redeem for bullion.

You or me....nope....not the right pedigree.

KnuckleDragger-X's picture

If the FED tries to drag their feet, the headlines would be very big and audit the FED would become the battle cry......

agent default's picture

In other news, Texas in the new member of the Axis of Evil, US to take prompt action to liberate the shit out of them and bring democracy north of the Rio Grande.

DeadFred's picture

Plans to send in special forces troops will be developed... oh yeah, they've already got that scheduled. Hostile territory indeed.

Mercuryquicksilver's picture

And the Federal Government has decided to withhold all forms of TX state subsidies and pork in .......... 4, 3, 2, 1

KnuckleDragger-X's picture

That I would like to see, since the rebuttal would be withdrawal from the union and I bet we wouldn't be the only state to leave....

Clint Liquor's picture

Obama would go all 'Abe Lincoln' on their ass.

DeadFred's picture

Hope Mr. Cunningham stays away from nail guns.

Spectre's picture

Fucking A ! Think I'll move back to Texas.