The university pension
fund's gold almost certainly is NOT being stored by the Federal Reserve Bank
of New York, which stores only central bank gold. Most likely the pension
fund's gold is just a matter of Comex futures
contracts, claimable against gold held in Comex-approved
vaults.
* * *
Perry, Some Lawmakers
Want State's Gold Back in Texas
By Emily Ramshaw and Aman Batheja
The Texas Tribune, Austin
Thursday, March 21, 2013
http://www.texastribune.org/2013/03/21/perry-some-lawmakers-want-states-...
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.
And he may have
legislative support to do it. Freshman Rep. 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
Reserve."
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' "physical
gold."
"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 or not."
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 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 state lines.
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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