Texas Launches Gold-backed Bank, Challenging Federal Reserve

[Constitutional Paulicy]

Texas Launches Gold-backed Bank, Challenging Federal Reserve
Written by Alex Newman

The State of Texas is setting up a gold-backed bank that will allow depositors to bypass the controversial Federal Reserve System and its fiat currency in banking and commerce, according to the state representative who authored the recently enacted law. Under the measure, passed overwhelmingly by lawmakers and signed in mid-June by Republican Governor Greg Abbott, Lone Star State officials will establish and operate the Texas Bullion Depository for anyone who would like to deposit and trade in precious metals. The implications are as big as Texas.

more here.... http://www.thenewamerican.com/econom...ederal-reserve

[Constitutional Paulicy]

Now this is something to get excited about. Texas could start a tidal wave across the nation!!

[Henry Rogue]

Some conservative and liberty-minded activists expressed concerns about the law because it creates yet another state agency. However, writing in the market-oriented Ludwig von Mises Institute, economist Ryan McMaken argued that the benefits outweigh the downsides in this case. “While the Texas depository is a government-owned enterprise, it nevertheless is an improvement since it is a case of decentralization (and arguably nullification) which provides alternatives to the federally controlled monetary and banking systems,” he said. “As Hayek and other Austrians noted for decades, a decentralization of the monetary system is a key first step in moving toward more sound money.”

Mixed feelings, the above quote covers my reaction to the news.

The law protects the assets from seizure by the feds or other forces, too.

But does it protect deposits from seizure by Texas government?

[puppetmaster]

I would open an account that just to see how it all works.

[Pericles]

I would open an account that just to see how it all works.

One of the problems is that you can't directly. Only entities who jump through the hoops to use the depository can store metals and transact in those metals. By the time it actually happens, that might get sorted out.

[willwash]

Is this something that is actually happening or is this another example of something someone proposed once and will die in committee?

[William Tell]

Is this something that is actually happening or is this another example of something someone proposed once and will die in committee?

It passed, the legislature, the governor signed it, it's law. We shall see what happens now.

[Zippyjuan]

Not quite a bank but a storage vault. They won't be issuing any gold backed money or let people borrow anything so it isn't "gold backed". It is not an alternative to the Federal Reserve other than their gold storage function (and the Fed only stores gold for governments- not businesses or individuals so it does not compete against them at that level either) Paid for by taxpayer money. The state of Texas doesn't have any gold but the University of Texas trust fund owns some and may deposit it into the vault.

[Created4]

It passed, the legislature, the governor signed it, it's law. We shall see what happens now.

Do you think this will face federal challenges in court? Is that anticipated? Are there any websites setup yet to track the progress of the implementation of this?

[Free Radical]

No governemnt, federal or state should be establishing any bank.

[Acala]

Not quite a bank but a storage vault. They won't be issuing any gold backed money or let people borrow anything so it isn't "gold backed". It is not an alternative to the Federal Reserve other than their gold storage function (and the Fed only stores gold for governments- not businesses or individuals so it does not compete against them at that level either) Paid for by taxpayer money. The state of Texas doesn't have any gold but the University of Texas trust fund owns some and may deposit it into the vault.

If they issue transferrable deposit receipts, then it absolutely IS issuance of a gold-backed currency and that's all a bank SHOULD be doing.

[Chester Copperpot]

i wish the OP's link would work

[Sonny Tufts]

But does it protect deposits from seizure by Texas government?

No, and it likely won't protect against seizure by the federal government, either. The statute says that any attempted seizure by any non-Texas governmental agency is void, but it's hard to see that this could survive a Supremacy Clause challenge.

[dillo]

Sounds like a trap to get idiots to put their PM's somewhere they can easily seize them

[Zippyjuan]

When was the last time gold was seized?

[Acala]

When was the last time gold was seized?

The last time it was being used as currency.

[William Tell]

When was the last time gold was seized?

Last time? Not sure, but NORFED's gold was seized less than a decade ago.

[TheCount]

Sounds like a trap to get idiots to put their PM's somewhere they can easily seize them

No, it's better than that. It's so that they can charge the public universities of the state a fee for storage of their gold.

[Zippyjuan]

The last time it was being used as currency.

Correct. That was in 1933- 80 years ago. Is gold used as currency by the United States today?