Texas latest to seek repatriation of gold held in vaults outside state

Hundreds of millions of dollars in precious metal at stake
By , Coin World
Published : 07/12/17
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Texas is the latest entity to begin efforts being undertaken by various government bodies globally to repatriate physical gold held elsewhere and direct the metal’s future.

Olenka Hamilton reports at SpearsWMS.com that Texas expects to move more than $861.4 million in gold from HSBC Bank vaults in New York City to Texas’ first state-administered bullion depository, which is scheduled to open in the state capital of Austin in December 2018.

Bringing the gold back to the Lone Stare State is the result of 2015 legislation introduced by Texas State Rep. Giovanni Capriglione, passed by the Texas Legislature and signed into law by Texas Gov. Greg Abbott. According to news reports, Capriglione’s initiative is aimed at relieving Texas of dependence on Wall Street banks and the Federal Reserve while bolstering the state’s “independence and sovereignty.”

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Andy Duehren reports at TexasTribune.com that Capriglione’s legislation did not secure the traction it needed for passage until bill language was rewritten to ensure there would be no costs to the state for the Texas Bullion Depository, by contracting with a private vendor and charging fees.

Texas has already engaged the services of Austin-headquartered Lone Star Tangible Assets to run the depository under a five-year contract, with two one-year extensions. Lone Star Tangible Assets could be able to open the depository initially in its current facility by January 2018 while a new dedicated facility is under construction.

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The depository will be able to store gold and other precious metals, permitting users to open accounts and pay for transactions with them, according to Duehren.

The $861.4 million in gold at stake are bullion assets overseen by the University of Texas Investment Management Company for both the University of Texas and Texas A & M.

It is being reported that the Texas Bullion Depository will not be a member of COMEX, a division of the New York Mercantile Exchange. That may be an obstacle to the gold moving to the depository, since one stipulation requires the depository to be a member of the Chicago Mercantile Exchange’s COMEX platform where gold futures contracts are traded.

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Older Comments (2)
CW readers may wonder how the University of Texas System (a 4-year public university system) has so much gold. As an alum I can tell you. The University of Texas System has a larger endowment than Harvard, Princeton & Yale combined! All UTS employees from janitor to president of the campuses across the state of Texas must be members of the Texas Teacher's Retirement System & a portion of each employee paycheck is taken out by mandate for their retirement account with the state of Texas. The University of Texas Board of Regents then invests the money in the investment marketplace, including in gold.. Just as a fun fact, the University of Texas was bequeathed the entire art collection of actress Farrah Fawcett upon her death - including one Andy Warhol portrait of her valued at $1 million - even though she only attended UT for one year before heading to Hollywood.
P.S. - Lone Star Tangible Assets LP is owner of U.S. Gold Bureau & Wholesale Coins Direct numismatic/precious metals dealerships.