By Keith Wagstaff | The Week – Tue, Mar 26, 2013
Rick Perry tells Glenn
Beck he wants the state's $1 billion in gold bars on Texas soil
Texas wants its gold back —
all $1 billion of it. That's what Gov. Rick Perry told Glenn Beck on his radio
show last week, according to the Texas Tribune.
Federal Reserve holds the gold bars, which are owned by the University of
Texas Investment Management Company. Perry wants to bring them all back to Texas
to store the gold in what would be called the Texas Bullion Depository.
Former Rep. Ron Paul (R-Texas), a
standard proponent, supports Perry's proposal. But Texas state representative Giovanni Capriglione,
who wrote legislation to fulfill Perry's wishes, wants to distance the move from
that kind of rhetoric, telling the Texas
Tribune that the measure is "not about putting Texas on its own gold
standard." He says, instead, that it looks to "give the state a reputation as
being more financially secure in the event of a national or international
But what's so bad about keeping the gold in the Federal Reserve's vault in
New York City? If there were a serious spike in inflation (a big worry of gold
standard supporters), there would be nothing to stop Texas from accessing its
store of gold in Manhattan. And taking the gold to Texas would likely be more
problematic than helpful. As Neil Irwin of the The Washington Post notes, building, staffing, and securing
the proposed Texas Bullion Depository would be incredibly expensive.
In fact, it would take a Mad Max-style breakdown to justify bringing all of
that booty back to Texas, says Irwin:
For it to make sense to go to all that hassle of storing your own gold, you
have to be insuring against some much darker possibilities, like a collapse of
the U.S. government and monetary system...
In some episode of hyperinflation and U.S. government collapse, as the nation
falls into a Hobbesian state of nature, paper dollars will be no good, but gold
would likely be the medium of exchange for buying food and guns and whatever
else is needed for Texas to prosper amid the post-apocalyptic hellscape. [Washington Post]
Another reason — other than the one put
forth by Capriglione — that a state might want to keep $1 billion of gold
handy is if it were planning to secede. Texas, after revolting from Mexico in
1835, existed as an independent republic until it was forced to rejoin the U.S.
following the Civil War. And the desire to regain its independence hasn't
dwindled much in the ensuing time — more than 100,000 Texans signed an
online petition earlier this year asking the White House to allow the state to secede.