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Texas announces contract for first state-run gold depository in U.S.

Jun 18, 2017

BY: CCNH-LFDA Highlights

This week Texas selected a private company to build and operate a bullion depository - a gold vault - for the state.

While the United States no longer owns enough gold to back up the value of all the U.S. dollars in circulation, the federal government does keep gold reserves at Fort Knox.

The Texas depository will secure any state-owned gold and will store gold from businesses and individuals for a fee. For example, Texas lawmakers would like the depository to hold the roughly $1 billion in gold owned by the University of Texas Investment Management Company, which oversees the assets of both the University of Texas and Texas A&M systems. Right now that gold is stored in New York.

Depositors will be able to write checks and transfer funds, making the depository essentially a gold-backed bank.

Supporters of the Texas depository argue that it provides an inexpensive and secure way of storing assets, noting that Texas law also protects any gold held in its depository from seizure by the federal government (which happened during the Great Depression). Others point out that the depository could save tax dollars that would otherwise be spent on storage fees for gold owned by publicly-funded institutions.

Opponents of a state repository argue that current gold depositories--such as the Federal Reserve vault in New York--are already secure and affordable, questioning whether the Texas option will really be an attractive alternative to gold owners. Others contend that the move is an attempt to undermine confidence in the U.S. currency system, or perhaps even a prelude to helping Texas create its own currency and leave the United States.

Would you support a state-run gold depository in New Hampshire? Share your opinion in the comments.

 

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