The Texas Bullion Depository took a step closer becoming operational earlier this month when officials announced the location of the new facility.
The creation of a state bullion 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 Federal Reserve’s monopoly on money.
Gov. Greg Abbot signed legislation creating the state gold bullion and precious metal depository in June of 2015. The facility will not only provide a secure place for individuals, business, cities, counties, government agencies and even other countries to store gold and other precious metals, the law also creates a mechanism to facilitate the everyday use of gold and silver in business transactions. In short, a person will be able to deposit gold or silver in the depository and pay other people through electronic means or checks – in sound money.
Earlier this summer, Texas Comptroller Glenn Hegar announced Austin-based Lone Star Tangible Assets will build and operate the Texas Bullion Depository. On Nov. 3, the company announced it will construct the facility in the city of Leander, located about 30 miles northwest of Austin. According to the Community Impact Newspaper, the Leander City Council has approved an economic development agreement with Lone Star. Construction of the depository is expected to begin in early 2018. Lone Star officials say it will take about a year to complete construction of the 60,000-square-foot secure facility located on a 10-acre campus.
The depository will operate out of Lone Star’s existing facilities during construction. It will provide services nationwide beginning in early 2018, with international services to be offered in the future phases, according to Community Impact.
“This state-of-the-art facility will provide tremendous benefits to the citizens of Leander and will give Texans a secure facility right here in the Lone Star State where their gold and precious metals will be kept safe and close at hand,” Hegar said in the press release.
The Texas Bullion Depository has already established an online presence. You can visit the depository website HERE.
According to an article in the Star-Telegram, state officials want a facility ‘with an e-commerce component that also provides for secure physical storage for Bullion.’ Officials say plans for a depository should include online services that would let customers accept, transfer and withdraw bullion deposits and related fees.
By making gold and silver available for regular, daily transactions by the general public, the new law has the potential for wide-reaching effect. Professor William Greene is an expert on constitutional tender and said in a paper for the Mises Institute that when people in multiple states actually start using gold and silver instead of Federal Reserve notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.
“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a ‘reverse Gresham’s Law’ effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes).
“As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”
University of Houston political science professor Brandon Rottinghaus called the development of a state gold depository a step toward independence.
“This is another in a long line of ways to make Texas more self-reliant and less tethered to the federal government. The financial impact is small but the political impact is telling, Many conservatives are interested in returning to the gold standard and circumvent the Federal reserve in whatever small way they can.”
The Texas gold depository will create a mechanism to challenge the federal government’s monopoly on money and provides a blueprint for other states to follow. If the majority of states controlled their own supply of gold, it could conceivably make the Federal Reserve completely irrelevant.
The depository is part of a broader movement at the state level to facilitate sound money, and potentially undermine the Fed’s money monopoly. A number of states have repealed taxes on the sale of gold and silver over the last two years, and that trend is expected to continue. A legislator in Alabama has already filed a bill to repeal the sales and use tax on gold, silver, platinum, and palladium bullion and coins in that state. As Ron Paul has said, “We ought not to tax money – and that’s a good idea. It makes no sense to tax money.”
Reporting from the Tenth Amendment Center contributed to this report.