The Lone Star state is well on the way to repatriating its gold from a New York bank vault to its own Texas Gold Depository.
The first batch of gold destined for the new depository likely will be about 5,600 gold bars owned by the University of Texas Investment Management Company. The bars, valued at about $600 million, currently are stored in a vault at HSBC Bank in New York.
And it's not just state-owned gold that will reside there. Texas residents will also be invited to store their precious metals at the depository (for a fee, of course).
The state also plans to use the Texas Gold Depository to create an alternate currency system - a system that will operate outside the jurisdiction of the U.S. Federal Reserve. This state-based system will allow Texans to use their deposits to pay for things, most likely by using Bitcoin's blockchain technology.
Such a plan is not illegal, but it's certainly unusual.
"This is the first of its kind in the world," said Anthem Blanchard, CEO of online precious metals retailer AnthemVault. Blanchard's company is one of about a dozen competing to be the firm that manages the Texas Gold Depository and its services. "Texas wants to show there are other ways to do things that are sustainable."
AnthemVault is a precious metals retailer based in Las Vegas. AnthemVault also has experience linking gold and digital currencies through something it calls HayekGold.
AnthemVault has proposed building multiple vaults throughout Texas to house the gold. Blanchard would also like to play a major role in setting up the digital payment system.
But all of this effort and expense - the original 2013 bill estimated the cost of building a vault system at $23 million - raises the question of whether it's worth it.
The supporters of the Texas Gold Depository think so - and here's why...
The driving force behind the Texas Gold Depository is a profound lack of trust in the U.S. government, the Federal Reserve, and the "Too Big to Fail" banks that brought us the 2008 financial crisis.
"Another 2008 is just a matter of time," Blanchard said. "People need currencies they can trust, stores of value that are liquid and that they can use in a digital world, but aren't exposed to the debt risks of the banks."
Many skeptics suspect that in a financial emergency, the government will seize any assets it can. Texas wants to make sure its precious metals, at least, are outside Washington's reach.
But the Texas Gold Depository's alternative currency would make it a fully functional, state-authorized payment system as well.
"You can write checks to individuals who have gold depository accounts, and you'll also be able to write checks to individuals and corporations who don't have gold depository accounts," bill sponsor Republican state Rep. Giovanni Capriglione told Trunews radio show in July. "We set up a system of depository agents so you can have any corporation, any group, basically start a depository agent, and they can send and receive through this depository system, outside of the Federal Reserve System."
Such a system also appeals to the quixotic separatist movement in Texas, which would need an independent monetary system to sever ties with the United States.
Blanchard sees the Texas Gold Depository system becoming a prototype that other states would copy - and even link to.
That would probably get the attention of the Fed, which so far has ignored the Texas Gold Depository experiment. If enough states set up their own currency systems and start networking them, the Fed would see its monopoly on currency vanish.
"This could very well make the Federal Reserve System unnecessary," said Capriglione.
The creation of the Texas Gold Depository may seem a bit eccentric now, but it will look prescient when the next financial crisis strikes.
"I think Texas is once again showing they're ahead of the curve," CIA Asymmetric Threat Advisor James Rickards told the Associated Press. Rickards also wrote 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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