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Title: Texas wants its gold back inside the state's borders
Source:
Associated Press
URL Source: http://hosted.ap.org/dynamic/storie ... AULT&CTIME=2015-07-04-10-30-36
Published: Jul 4, 2015
Author: Will Weissert
Post Date: 2015-07-04 18:09:54 by cranky
Keywords: None
Views: 1150
Comments: 13
Forget Fort Knox or the Federal Reserve. Texas has decided to start keeping its gold holdings within in its own borders. But what makes sense politically in such a sovereignty-loving place is creating a logistical conundrum. Texas is the only state that owns an actual stockpile of gold, according to public sector and financial industry experts - not just gold futures or investment positions, but approximately 5,600 gold bars worth around $650 million. The holdings, stored at a New York bank, for some harken back to century-old fears about the security of currency not backed by shiny bullion. The Legislature's decision this summer to bring its gold cache home was hailed by many conservatives, and even some on the far left, who are suspicious of national government. "There will always be the exact same amount of gold in there as the amount that was put in," no matter what happens to the financial system, said Republican state Rep. Rep. Giovanni Capriglione, a former tea party organizer from the Dallas suburbs who authored the gold bill. But for the Texas comptroller's office, which has to implement the policy, the catch is that the new Texas Bullion Depository exists in name but not reality. The law doesn't say where the depository would be or how it should be built or secured. No funding was provided for those purposes or for leasing space elsewhere. Further complicating matters is a provision allowing ordinary people to check their own gold or silver bullion into the facility. "We are honestly at the phase where the questions we are answering are creating more questions that we have to answer," said Chris Bryan, a comptroller's office spokesman. Charged with figuring everything out is a four-member task force within the comptroller's office, which recently dispatched an official to a precious metals conference to study up. One immediate concern is the possible cost. When Fort Knox was completed in 1936 it cost $560,000 - or roughly $9.2 million in today's dollars. When Capriglione first introduced his bill in 2013 it had an estimated cost of $23 million. But Capriglione now thinks private companies would bid to create a depository in exchange for charging storage and service fees. The plan has kicked up chatter outside of Texas that it's a step toward secession, an idea raised now and then on the state's farthest political fringe. "Just moving it would be pretty expensive and, unless Texas is anticipating withdrawing from the union, which I suspect is some peoples' want, I don't see what advantage it is...," said Edwin Truman, a senior fellow at the Washington-based Peterson Institute for International Economics who has written about gold and monetary policy. "What are you getting for what you're paying for?" But Capriglione says he's just convinced that gold is safer, especially close at hand. After the bill sailed through the Legislature, Republican Gov. Greg Abbott signed it and tweeted: "California may be the golden state, but Texans deserve to keep their gold in-state!" Texas' state-owned gold is held by the University of Texas Investment Management Company, the nation's second largest academic endowment behind Harvard. It began gradually amassing gold futures in 2009 as a hedge against currency weakness in the recession. It eventually transitioned to physical bullion, and by 2011 had $1 billion worth. The price of gold has since mostly slumped amid a soaring stock market. Today, the fund's gold bars represent about 2.5 percent of its $25.4 billion in holdings, said Chief Executive Officer Bruce Zimmerman. Asked about the new depository, Zimmerman said, "We don't do politics. We're just investors." The Fed declined comment on the new Texas depository, as did HSBC bank, which currently stores the gold bars in an underground vault in Manhattan. Stacked together, the state's gold occupies about 20 square feet. It's unclear whether repatriating it could be done with an electronic transfer or would require a fleet of planes or armored cars. One possible effect of the new depository might be more attention to the idea of returning to the gold standard, long a cause of former Texas Rep. Ron Paul. The Federal Reserve was founded more than a century ago so that the value of the U.S. dollar no longer had to be anchored to gold, and Richard Nixon formally scrapped the gold standard in 1971. "I think Texas is once again showing they're ahead of the curve," said James Rickards, author of the 2014 book "The Death of Money: The Coming Collapse of the International Monetary System." `'They're not waiting for the disaster, but preparing for it."
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#1. To: cranky (#0)
Makes you wonder what's in Fort Knox, if anything.
Probably just dust, cobwebs, and empty space. In the back on the wall, a drawing and "Kilroy Was Here". Si vis pacem, para bellum
FWIW, the US mint website claims: "Amount of present gold holdings: 147.3 million ounces.". There are three kinds of people in the world: those that can add and those that can't
http://libertysflame.com/cgi-bin/readart.cgi? ArtNum=40200 Writing's On The Wall: Texas Pulls $1 Billion In Gold From NY Fed, Makes It "Non-Confiscatable" (Texas Bullion Depository)
Worth watching. The Germans are repatriating their gold which we were "safeguarding" for them. They say they are not getting back the same gold bars that our government took but that they are being given gold from newly melted gold bars. That is a red flag. Our government has a regular habit of installing puppet governments around the world who quickly decide that their national gold holdings would be much safer in America. It raises questions about whether the Fed has been using these foreign gold holdings to keep the price of gold depressed for decades, melting down and recasting the gold of foreign governments to pay off anyone powerful enough to demand that America return their gold. Like Germany. Only a country as powerful as Germany seems to have any chance of recovering its gold, once deposited in America. Texas' gold is a small enough amount that they will probably get it back. Some of the foreign governments won't be so lucky. I think the gold depository is being operated as a Bernie Madoff Ponzi scheme. Use the gold on-hand to keep gold prices depressed, stall and delay endlessly if some powerful country demands its gold back, melt down and recast gold to pay off the few who persistently demand their gold back. For anything other than a determined and powerful country wanting its gold back, just bribe the top officials directly in cash dollars.
The Germans are repatriating their gold which we were "safeguarding" for them. They say they are not getting back the same gold bars that our government took but that they are being given gold from newly melted gold bars. That is a red flag. Yup, I posted that article and that article was in Bloomberg I believe - not some gold bug survivalist online newsletter, either. Also, the gold is taking forever to repatriate. Another red flag. From the story: http://libertysflame.com/cgi-bin/readart.cgi?ArtNum=37763 Where Is Germany's Gold? Almost half of Germany’s gold is stored in vaults under the streets of Manhattan. Or is it? Source: bloomberg.com In October 2012, as part of a compromise with the audit court, the Bundesbank said it would start bringing home some of the reserves. At first, the bank said it would move 150 tons of gold, valued at about $8.4 billion at the time, from New York to its own vaults, dividing the shipments evenly over three years. “It was a huge success for us,” Boehringer says. “I would never have believed that.” The German central bank later expanded its repatriation plan to 300 tons from New York to Frankfurt by 2020. Boehringer had to wait until Christmas Eve 2013 to see if the Bundesbank was making good on the pledge. That day, the central bank announced the first- year tally in the tabloid Bild under a front-page headline, “Today Only Good News.” “At last! The Bundesbank gets its gold treasure back,” the story said. The amounts, however, were underwhelming. Although 32 tons came from the Bank of France, just 5 tons came from New York—a tenth of the original plan of 50 tons a year from the New York Fed. “Why so little material?” Boehringer recalls wondering. “Something smelled fishy.” The article quoted Bundesbank President Jens Weidmann saying the repatriation had been “a huge logistical challenge.” Yet one ton of gold, formed into a cube, is just larger than a plastic milk crate. Five tons of gold bars can fit into the back of a pickup truck, assuming the truck’s suspension can handle the weight. “The organisational preparations were very time-consuming since the required agreements and contracts are voluminous and detailed,” the Bundesbank’s Thiele said in a statement four weeks later. Additionally, some bars in New York had to be melted and recast. To Boehringer, the recasting was the ultimate red flag. It meant any trace of original serial numbers had been wiped out. “Their untouched existence since the 1960s is no longer provable,” Boehringer says. The Bundesbank explained that it recast the bars because they hadn’t met the “London good delivery” standard. Such gold is at least 99.5 percent pure and comes in bars of roughly 400 troy ounces, or 12.44 kilograms. They must bear certain marks, such as year of manufacture, and have sides that measure within specified dimensions. The gold in American vaults is a mix of London good delivery and lower-quality bars. Boehringer figured maybe the German bars had oddball weights and purities and needed to be recast. He did some quick math on the Bundesbank’s own numbers, dividing the total weight it had disclosed for New York holdings by the number of bars it listed. It came out to about 12.5 kilograms per bar—same as London good delivery. If the central bank’s published numbers were right, Boehringer says, “There would not be a reason to melt them, but they did.”
It is clear the rest of the world knows the American jig is up. The world still fears the USA because the USA can cause problems like riots in the streets and arm rebels and so on like in Syria or the hinted at assassination plot of Greece's prime minister because of Russian pipeline deals, etc. But the financial melt down - which was caused in America by Americans for American reasons but hurt the Europeans hard - is some sort of beginning of the end of American financial hegemony. http://libertysflame.com/cgi-bin/readart.cgi?ArtNum=37763 Boehringer still doesn’t buy it. “Why, of all the possible bars—120,000—it chose to repatriate, did it choose bars that were nonconforming?” He also questions why the Bundesbank doesn’t publish lists of bar numbers, which would allow other depositors to see if there’s any double counting of the same gold under multiple owners. The Bundesbank says it has such lists for all the gold it keeps in custody at the New York Fed but that “security reasons” prevent it from making those lists public. “Why is a bar list a security risk?” Boehringer says. It reminds him of the 1920s visit the Reichsbank president paid to the New York vault. “That’s the culture of ‘I don’t want to know,’ ” he says. Boehringer speculates that individual bars may have several owners, perhaps as the result of bars being leased, sold, or subject to complicated financial arrangements. “I can’t prove it,” he adds, saying the onus of proof should be on the central bankers, not him. He isn’t alone in raising doubts. John Hathaway, co-manager of the $1.3 billion Tocqueville Gold Fund, says Germany might need the slow, seven-year repatriation window to unwind complex financial arrangements by which the gold was loaned out, perhaps several times. Their questions about multiple owners aren’t completely out of left field, as there is a loan market in which gold bars are put up as collateral and then sold to third parties for the duration of the deals. The German central bank says that’s not the case with its New York gold and that its repatriation plans will be completed on schedule. “The Deutsche Bundesbank has never loaned gold bars held in custody at the New York Fed into the market or to other central banks,” the bank said. The New York Fed says it isn’t party to any transactions that the gold in its custody may be involved in. It says all gold bars on deposit are present at the 33 Liberty St. vault and that the bank doesn’t recognize any third- party rights or interests other than those of the account holder. In response to questions for this story, the bank also says foreign depositors are able to conduct inventories and that it provides those depositors with lists of bar numbers for all holdings. The gold may be in order. The gold may not be in order. But either way, gold bugs around the world are winning unprecedented concessions from their governments, and gold is streaming out of 33 Liberty St. and across the Atlantic. In May 2014, the Bank of Italy, which has the third-biggest gold reserves after the U.S. and Germany, ended years of secrecy by disclosing the locations of its holdings. Citing the German repatriations, the central bank said about half its gold is in Rome and most of the rest is beneath the New York Fed. Then in November, the Dutch central bank announced that it had secretly moved 122.5 tons of gold from New York to Amsterdam. In apparently just months, the Dutch had shipped almost 25 times the gold that Germany moved in all of 2013. “Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence,” the Dutch bank said in its announcement. Soon after, the leader of France’s anti-euro, anti-immigration National Front party, Marine Le Pen, asked the Bank of France for an independent audit of its gold and to reveal any lending or financial commitments related to the reserves. At the end of November, a referendum in Switzerland to repatriate some holdings failed but led the country’s central bank to disclose locations and amounts of its gold for the first time. Swiss politicians are pushing for more. “I want a clear inspection where you have a list of all the gold bars, where it’s written that it’s fine gold and only belongs to Switzerland,” says Lukas Reimann, a member of the Swiss parliament who led the referendum.
Interesting that the Dutch got their gold back so quickly but Germany is taking forever and ending up with recast bars. You think maybe Ukraine's missing gold reserves are being melted down in New York and delivered to the Germans?
I think maybe because Germany was America's defeated occupied 'ally' that the USA could take advantage of the long subservient Germans over the Dutch? Also, yes, the Ukrainian gold maybe being re-cast for Germany. I bet the Texas gold is distinct with a different casting than the foreign gold reserves and if they tried that trick on them it would not go unnoticed in domestic news cycles?
In the gold market, you have owners, holders, and leasers. Then you have smaller investors who hold gold certificates for bullion supposedly deposited in some vault. AFAIK, the leasers don't ever take actual possession of the gold but rely on central gold depositories that the gold they have leased is present and available. The gold leasing seems very dicey to me. I wouldn't allow it if I set policy. The liquidity that offers is not in anyone's best interest. It is much more an incentive to current governments to make money from a non-tax source that they can spend. It is never more than a very short-term solution to financial problems.
I think Texas has some standard gold bars. No word that it's old gold from some Texas hoard. You'll recall that FDR melted down all that he confiscated. Bloomberg, 2013 In the three months that ended Feb. 28, the Austin, Texas-based fund bought $75 million in gold futures, $225 million in developed-market equities and $75 million in emerging-market equity futures, Bruce Zimmerman, the chief executive officer, said yesterday in a telephone interview. The fund, which manages $29.2 billion, started taking delivery of gold through futures starting in 2008 as a hedge against inflation, Zimmerman said. While fund managers and directors remain concerned global consumer prices may increase, the fund wanted to increase investments in equities, he said. “Our idea was to buy and hold gold, and when the world’s central banks begin tightening, we’ll sell,” Zimmerman said. “The price of gold has traded off, but the world’s central banks haven’t started tightening.” Because of the leverage involved in futures contracts, the new gold and emerging-market investments are valued at about $750 million, and the fund’s total exposure to the metal hasn’t changed, Zimmerman said. The U of T isn't perverted but they obviously enjoy a bit of goldbuggery. It seems they've played the gold market pretty well. And now that they have amassed a considerable fortune in gold holdings, they're going to haul it all back to Texas. Which I think is pretty funny. : )
It is kinda funny that Texas has finally realized that their gold hoard is stored in...New York City!!!
Feds ‘lose’ audits for Fort Knox Gold
#2. To: hondo68 (#1)
" Makes you wonder what's in Fort Knox, if anything. "
#3. To: hondo68 (#1)
Makes you wonder what's in Fort Knox, if anything.
#4. To: cranky (#0)
#5. To: cranky (#0)
#6. To: TooConservative, cranky (#5)
Worth watching.
#7. To: TooConservative, cranky (#5)
think the gold depository is being operated as a Bernie Madoff Ponzi scheme. Use the gold on-hand to keep gold prices depressed, stall and delay endlessly if some powerful country demands its gold back, melt down and recast gold to pay off the few who persistently demand their gold back. For anything other than a determined and powerful country wanting its gold back, just bribe the top officials directly in cash dollars.
#8. To: Pericles, cranky, hondo68 (#7)
#9. To: TooConservative, cranky, hondo68 (#8)
You think maybe Ukraine's missing gold reserves are being melted down in New York and delivered to the Germans?
#10. To: TooConservative, cranky, hondo68 (#9)
(Edited)
#11. To: Pericles (#10)
That is an eye opener. I don't know if holding the gold is the same thing as owning the gold, though.....
#12. To: Pericles, redleghunter (#9)
April 25 (Bloomberg) -- The University of Texas Investment Management Co., the third-largest U.S. academic endowment, sold $375 million in gold bars from holdings of about $1.4 billion and reinvested the proceeds in gold futures and equities.
#13. To: Pericles (#11)
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