You'll recall last year I blogged about the fact that the state of Texas had passed a law creating its own gold depository. We, lest you think it was all talk and no action, Ms. M.W. found this article at our friends at Zero Hedge, indicating that it was not just talk:
There's something in this article that caught my attention, and no doubt it did the reader's as well:
Laying the Ground Work for Electronic Gold-Based "Money"
For one, many state politicians hope that the State of Texas will be able to relocate its own gold holdings into Texas from New York where it currently sits. The state spends a million dollars per year on its storage.
Moreover, existence of the depository opens up the possibilities for users creating a new type of currency in which purchases are made electronically with the backing of the gold in the depository. In other words, one could potentially use the depository's infrastructure to make purchases using gold, and to have gold either directly deposited into another's account, or converted to US dollars and deposited in a conventional bank. Arguably, this is just an electronic version of gold-backed money.
In other words, in this speculative reading of the event, Texas is getting in on the ground floor of the current meme of "crypto-currencies". Now, I personally suspect that the push behind crypto-currencies has been a centrasl bank-driven meme, after all, none other than the Bank of England has been in on it, creating their own versions. In other words, the move may not be such a good thing, since the goal here seems to be the removal of physical media of exchange as a part of the move to drive a "cashless society" meme, yet another theme near and dear to the banksters' black hearts. How better to "reassure" a skeptical public than to have a staunch "conservative" state like Texas involved with the scheme.
Of course I've long been of the opinion that such moves are doomed to failure: people will always need real physical media of exchange, and as I've also suggested, so will central banks and even more importantly, criminal undergrounds and "hidden systems of finance." The bearer bonds scandals of almost a decade ago are, to my mind, a proof of this.
There are other high octane speculative possibilities though, and among them is the growing realization in the USSA that the country is badly divided(after all, the so-called "blue" counties are increasingly determining the outcomes of federal elections, with the rest of the country (the "red" counties) being drug along. This election demographic has helped propel the feeling among many Americans that they simply no longer have any genuine representation at any federal level. In response, a growing number of states - like Texas - have been passing resolutions in their legislatures challenging federal decrees and executive ukases and encyclicals...er... I mean, executive orders. And a number of these resolutions have included resolutions reinforcing the constitutional system of money, i.e., that Congress alone has authority to "make and coin money and regulate the value thereof." These resolutions often deliberately tie bullion to money, and Texas' bullion depository has now added teeth to the effort.
The other scenario, implicit in the Zero Hedge article, is the growing distrust of the banking system and the federal reserve, and to this extent, the initial measure was drafted with this in mind. Recall that Texas' initiative also means repatriating its gold from the Federal Reserve, a move in which it joined Germany and a variety of other countries attempting to recover their gold. Whether or not it will be any more successful remains to be seen
In the long run, of course, this means Texas has reasserted a measure of state sovereignty almost unheard of since the War Between the States. There are other possible interpretations of the move, of course, and time will tell what the ultimate meaning of the initiative in Texas is.
See you on the flip side...