By: David Heacock
While Cyprus and other EU countries plunder their citizens’ bank accounts, the state of Texas seems to be making an unprecedented move towards insuring the wealth of its people. A Texas lawmaker recently announced legislation to claim the state’s gold from the Federal Reserve in New York and store it in a newly created “Texas Bullion Depository.” The depository would also allow individuals to store their personal gold collections with government backing.
The idea has gained strong support from Governor Rick Perry, who has developed an increased awareness of the Federal Reserve’s flaws since listening to Ron Paul on the campaign trail. In a recent interview, Perry stated “If we own it, I will suggest to you that that’s not someone else’s determination whether we can take possession of it back or not.” Such independence would give Texas greater ability to protect its wealth from a potential dollar collapse.
One critic of the proposal calls it “uber-hawkish” and “vaguely paranoid,” yet cites only security concerns as a shortcoming. It’s true – freedom from a centralized system comes with certain risks, but it’s this decentralization that can prevent a systematic failure from hurting larger numbers of people. If one has doubts about the Federal Reserve’s ability to manage an emergency, it would be wise to move assets out of the Fed’s hands. After all, the federal government has been known to abuse the right to own gold, such as when President Roosevelt banned the “hoarding of gold coin, gold bullion, and gold certificates…” with Executive Order 6102.
In this case, it may be worth bearing the extra risk of security concerns to prevent an even larger failure down the road. As Thomas Jefferson once notably stated, “I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it.” As fear of bank runs becomes commonplace, it will be interesting to see how governments take precautionary measures. Hopefully, more states will follow Texas’ example and take steps to protect their citizens from inflation and other schemes designed to bail out the big banks at the expense of ordinary Americans.
Tags: Federal Reserve, gold, Texas, Cyprus