On Friday, Gov. Greg Abbott signed legislation that will create a state-run gold depository in the Lone Star State – one that will attempt to rival those operated by the U.S. government inside Fort Knox and the Federal Reserve Bank of New York’s vault in lower Manhattan. “The Texas Bullion Depository,” Abbott said in a statement, “will become the first state-level facility of its kind in the nation, increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside our state.” Soon, Abbott’s office said, the state “will repatriate $1 billion of gold bullion ((As you will see if you read the article, this is malarky. There is no such $1 billion in gold from the Federal Reserve in New York to Texas.” In other words, when it comes preparing for the currency collapse and financial armeggedon, Abbott’s office really seems to think Texas is a whole ‘nother country
Just read it. And weep.
PS. Bonus crazy:
Indeed, Texas has no gold bars in the Federal Reserve’s New York vault. And what the state has is not worth a billion dollars. Instead some 4,200 gold bars bought in 2011 by the University of Texas’s endowment fund (the second largest in the country after Harvard’s) are stored in the basement vault of HSBC’s headquarters at 450 5th Avenue in New York City, just south of the New York Public Library. For the last four years, the endowment has paid an estimated $1 million per year to store their gold there. (If it had been at the New York Fed the cost would have totaled about $15,400 over that period). And the new depository law does not require the university’s endowment fund to relocate the gold to Texas.
How did UT end up holding actual gold?
In 2010 and 2011, … the University of Texas Investment Management Company’s board of directors … put nearly 5% of the then-$19 billion university and pension fund they manage into physical gold by converting options into bullion. …
When the endowment fund bought the gold, their basis for calculating a return – called their cost basis – was $1,150.17 per ounce. The fund eventually traded a third of their physical gold stake for gold futures and other equities, but never reduced their overall exposure to gold. That’s why they still own about 4,200 bars worth just under $500 million. After a significant run-up and subsequent fall in 2012, gold traded on Monday at $1,186. Over more than four years that just a 3% gain for the fund before you account for the cost of housing the gold in New York [which is $1 million / year] and the transaction costs that will be incurred if and when the endowment fund ships the bars back to Texas or sells them to a buyer. Over the same period, the S&P 500 index – a broad measure of owning stocks – gained 60%.