Cyprus is all the news right now, main stream media has a hush hush policy and deal after deal is trial ballooned yet no solution. …Because there is no solution and it is only a matter of time before people figure out that Cyprus, as everything else since 2008 is a SOLVENCY crisis which more and more liquidity cannot fix or repair. Rather than writing about the “topic du jour” which is currently Cyprus (and will be 24/7 this week), I’d rather write about a subject near and very dear to my heart. “Texas.” God bless Texas!
This interview with Jim Rickards came out this past Friday:
Apparently there is a bill proposed to the Texas legislature pertaining to gold (believe it or not). This bill would allow various state pension plans to invest directly in PHYSICAL gold. Currently the only way is through paper products that “allege” or claim to have gold. I also understand that the University of Texas purchased some $1 billion worth of gold a little over a year ago. If I recall, they made their purchase on the COMEX and are storing the gold at the NY Fed… but this could change.
The proposed bill would create the ability for the state to actually build its own depository where “state sovereign” gold would be stored. Can you imagine the response out of Washington if a bunch of redneck, backwoods Texans demanded their gold be delivered? Would Texas receive the same “7 year” waiting period response that Germany received when they requested that theirs be delivered? The bill would also allow for individuals to eventually store personal gold in this depository. But wait, it gets even better… MUCH better!
This bill contains a section where if the US were to go all “1933″ on us again and order confiscation of gold, Texas (if passed) is saying otherwise. By using the 10th amendment (State’s sovereignty rights), this bill essentially says that “citizens” of Texas would be exempt from a federal confiscation if one were to occur! Can you even imagine the gall, the nerve of Texas to do something, ANYTHING like this? Having the forethought and seeing exactly what’s coming… and taking action AHEAD of time? Doesn’t sound like normal politicians to me.
Actually if I had to guess, Ron Paul has his fingerprints in here somewhere. Think about it, a bill being offered which is good for the state, good for its citizens in so many ways and has that “4 letter word” gold in it? Ron Paul (or maybe Kyle Bass) is in the mix somewhere… somehow! I would love to see this pass for so many different reasons, BUT (yes there’s always a “but”) can you figure out what would come next? The military, the US military. First, let me digress a little. I read a story and now cannot find it where someone said that “shipping gold from NY to Austin would be difficult.” Huh? Difficult? This (if my math is correct) is only about 20 tons, a pittance compared to Germany’s request size wise and this shipment doesn’t have to “cross the pond.” The “difficult” part in my opinion would be actually coming up with the 20 tons in the first place but that’s another story for another day.
The “problem” as I mentioned, would go something like this. Texas passes this law, starts to build a depository and requests its gold from the bowels of the NY Fed. I can already see the dust storm coming (and no it’s not a cold front kicking up some dry sand ahead of it). Were the federal government to spaz out and declare a confiscation and Texas was sitting on a “hoard” of gold, this dust storm would be a bunch of military tanks rolling along on their way to make a “withdrawal” from the depository. Say what you will, but if you really think about it, other sovereign countries have been invaded and their gold plundered many times for less and under many “guises.” What do you think happened to Saddam’s gold or Qaddafi’s?
If this bill passes, you can pretty much bet that “them’s fighin’ words” will be what we hear out of Washington. It is however noteworthy that Arizona and Utah have bills proposed to make metals legal tender. Of course we will see a federal court try to strike anything like this down citing “counterfeiting” …which is exactly what the Fed does every single day. They print notes of no value yet claim they are valuable… which is why us Americans really shouldn’t fear a replay of Cyprus here in the States. Counterfeiters never need to rob the banks… only the vaults!