Call it the Rick Perry gold rush: The governor wants to bring the state’s gold reserves back from a New York vault to Texas.
Giovanni Capriglione, R-Southlake, is carrying a bill
that would establish the Texas Bullion Depository, a secure state-based
bank to house $1 billion worth of gold bars owned by the University of
Texas Investment Management Company, or UTIMCO, and currently stored by
the Federal Reserve.
The idea isn’t entirely new. Some Republican members worked on a gold
bill last session that was never filed. And gold-standard-backing Ron Paul, the former Texas congressman, has raised repeated concerns about the safety of states' gold supplies.
"If you think gold is a hedge, or a protection, you always want it as
close to the individual and the entity as possible," Paul told the
Tribune on Thursday. "Texas is better served if it knows exactly where
the gold is rather than depending on the security of the Federal
Bringing Texas' gold home has gained
more traction this legislative session because of Perry’s vocal support
for it. On conservative radio host Glenn Beck’s show on Tuesday, the governor said Texas was “in the process” — the
legislative process, he later clarified — of “bringing gold that belongs
to the state of Texas back into the state.” He argued that the state
was at least as capable as the Federal Reserve of safeguarding Texas’
“If we own it,” Perry said, “I will suggest to you that that’s not
someone else’s determination whether we can take possession of it back
State Rep. Lon Burnam,
D-Fort Worth, said he was familiar with Capriglione's bill but was
skeptical that it addresses a legitimate problem facing the state.
“We’ve got plenty of real problems that we’re not going to deal with this session," Burnam said. "Let’s deal with them.”
Capriglione said he was at a Tea
Party event in Tarrant County earlier this year where Perry spoke about
the state’s gold investments as an economic development tool. Since
then, he has been working with Perry’s office on the bill.
“Something on the scorecards of a lot of these businesses in deciding
whether they want to come to Texas is stability and gold as being one
of those items,” Capriglione said. “I think it’s been in his
consciousness for a while in trying to get some sort of depository in
the state of Texas.”
He has also spoken with UTIMCO, which owns the 6,643 gold bars currently housed underground in New York City.
“We’re trying to figure out the right amount of gold to have here in Texas,” Capriglione said. “'We don’t want just the certificates. We want our gold. And if you’re the state of Texas, you should be able to get your gold.”
The United States and many other countries stopped pegging their
currencies to the gold standard decades ago. Capriglione said the bill
is not about putting Texas on its own gold standard. Rather, a
depository would give the state a reputation as being more financially
secure in the event of a national or international financial crisis.
“For us to have our own gold, a lot of the runs on the bank and those
types of things, they happen because people are worried that there’s
nothing there to back it up,” Capriglione said. “So I think this cures a
problem before it can happen.”
Physically transporting gold that various state entities own from New
York City or other banks to Texas would be impractical from a security
and logistics standpoint, Capriglione said. He believes it makes more
sense to sell the gold Texas has elsewhere and repurchase it within
He said he doesn't think the measure would be a significant expense,
because the gold bars could be safeguarded in a small area, no bigger
than 20 square feet.
Capriglione said he is working on revisions to the bill to address
some concerns he has heard. He plans to make sure the bill would not
cause the state to change its overall asset portfolio to be more heavily
invested in gold. Also, to lower the bill’s costs, he expects to change
the language to allow some of the administrative costs of building and
running the depository to be handled by the private sector.
Such a bill might not divide lawmakers along strictly party lines. State Sen. Rodney Ellis,
D-Houston, called the bill "an interesting concept" but said he would
want to learn more about it and talk to "colleagues in the financial
industry" before weighing in on its merits.
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