Fantasies of secession danced like tumbleweed when Gov. Greg Abbott of Texas signed an odd new law in June authorizing the state to be the first in the nation to create its own gold bullion depository. The goal, Mr. Abbott’s office announced, is to “repatriate $1 billion in gold bullion from the Federal Reserve in New York.” That’s repatriate, as in moving 6,643 gold bars from one country to another.
Texas politicians regularly thrive at the ballot box on expressions of contumely toward the federal government. And here was one first broached by former Gov. Rick Perry and enthusiastically delivered by the legislature to his Tea Party-backed successor, Mr. Abbott. Now that it’s law, will there be photo ops of the gold being trundled by mule teams from the Wall Street canyons of Yankee-land? Will Texas Rangers be herding it southward to the tune of “The Eyes of Texas?”
Not likely. First of all, the gold is owned not by the state but by the University of Texas Investment Management Company, which insists it will be the one to decide whether it’s worth moving from New York. The company, which manages the university’s huge endowment, now pays about $650,000 a year to have the Fed protect the gold in a mid-Manhattan vault and it could cost even more were Texas to take charge, according to critics. Costs might be held down by inviting the private sector to create and run a bullion depository, but this is only one of the possibilities that have been handed off to the state comptroller’s office for study.
And now that political reality is setting in, the proposed transfer is losing its billion-dollar luster. University managers estimate the lode is actually worth a mere $647 million, according to The Texas Tribune. Nevertheless proposals to house the gold already are floating in, with one private builder promising a depository with foot-thick walls that will be “a monument of the state of Texas.” Some experts, however, are warning that the “negative impact on liquidity” and other variables might make the trip a mistake. Others say there’s no need to move the gold at all: Simply sell it in New York, then buy replacement gold to put in existing Texas security vaults quietly run by armored car companies.
Politically, that would be fool’s gold, with no visible payoff, no gold ribbon-cutting for politicians to have whooping Texans rally ‘round. “If you’re the state of Texas, you should be able to get your gold,” insisted Giovanni Capriglione, a member of the state House of Representatives and the main sponsor of a grandiose reach for gold that it turns out Texas doesn’t really have.
http://takingnote.blogs.nytimes.com...ight-region&WT.nav=opinion-c-col-right-region
Texas politicians regularly thrive at the ballot box on expressions of contumely toward the federal government. And here was one first broached by former Gov. Rick Perry and enthusiastically delivered by the legislature to his Tea Party-backed successor, Mr. Abbott. Now that it’s law, will there be photo ops of the gold being trundled by mule teams from the Wall Street canyons of Yankee-land? Will Texas Rangers be herding it southward to the tune of “The Eyes of Texas?”
Not likely. First of all, the gold is owned not by the state but by the University of Texas Investment Management Company, which insists it will be the one to decide whether it’s worth moving from New York. The company, which manages the university’s huge endowment, now pays about $650,000 a year to have the Fed protect the gold in a mid-Manhattan vault and it could cost even more were Texas to take charge, according to critics. Costs might be held down by inviting the private sector to create and run a bullion depository, but this is only one of the possibilities that have been handed off to the state comptroller’s office for study.
And now that political reality is setting in, the proposed transfer is losing its billion-dollar luster. University managers estimate the lode is actually worth a mere $647 million, according to The Texas Tribune. Nevertheless proposals to house the gold already are floating in, with one private builder promising a depository with foot-thick walls that will be “a monument of the state of Texas.” Some experts, however, are warning that the “negative impact on liquidity” and other variables might make the trip a mistake. Others say there’s no need to move the gold at all: Simply sell it in New York, then buy replacement gold to put in existing Texas security vaults quietly run by armored car companies.
Politically, that would be fool’s gold, with no visible payoff, no gold ribbon-cutting for politicians to have whooping Texans rally ‘round. “If you’re the state of Texas, you should be able to get your gold,” insisted Giovanni Capriglione, a member of the state House of Representatives and the main sponsor of a grandiose reach for gold that it turns out Texas doesn’t really have.
http://takingnote.blogs.nytimes.com...ight-region&WT.nav=opinion-c-col-right-region
