James Rickards: Texas Law Would Protect Its Gold from Government Seizure

A Texas state lawmaker has proposed a bill that would allow the state to store its own gold in a manner that deem any attempts of government confiscation to be “null and void,” James Rickards, senior managing director of Tangent Capital Partners and author of Currency Wars, told Yahoo.

The state's gold reserves are currently stored in New York under the watch of the Federal Reserve. But Gov. Rick Perry thinks Texas should be keeping watch over its own gold. On the Glenn Beck show, Perry announced that the legislative process to bring the gold home is currently under way, The Texas Tribune reported.

The idea of Texas becoming the keeper of its own gold raises issues of storage and protection.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

But Perry noted that the state is at least as capable as the Fed is of safeguarding the state’s “physical gold.”

The bill, put forth by State Rep. Giovanni Capriglione, would create the Texas Bullion Depository.

Rickards has read the proposed legislation and describes it as a “very significant development.”

With regard to the proposed depository, he said to “think of it as the Fort Knox of Texas.”

He explained that a facility such as Fort Knox is a sovereign depository, which houses sovereign gold. Likewise, a private depository offers services to private owners.

What is being proposed in Texas is “one of the first sovereign depositories of private gold.” This means gold belonging to individuals could be stored with state government backing.

Moreover, Rickards says, the bill includes language that will tell the government to “shove off” if they ever tried to confiscate the gold. He said the power to do so is granted by the 10th Amendment of the U.S. Constitution.

“You’ve got the state of Texas standing up for you if the federal government tries to do what they tried to do in 1933, which is take the people’s gold,” Rickards told Yahoo.

“Personally I think this is a game changer in the way the world of institutional investors are going to look at gold,” he added.

If the bill were to become law, according to Rickards, it would permit Texas pension funds to invest in physical bullion, an option they currently do not have.

Capriglione identified financial security as a key benefit of the proposed legislation. He believes having a state depository could prove to be a wise move in the event of a crisis or even for people who are concerned about the risk of crisis.

“For us to have our own gold, a lot of the runs on the bank and those types of things, they happen because people are worried that there’s nothing there to back it up,” Capriglione told The Tribune. “So I think this cures a problem before it can happen.”

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

© 2013 Moneynews. All rights reserved.