Texans anxiously eye gold reserves in Cyprus crisis
Those who own gold there say they want their gold - and not certificates
Understandably nervous over the economic crisis in Cyprus, with banks being closed for nearly two weeks and tight restrictions on cash, Texans here stateside say they want their gold - the physical gold, and not some certificates, to shore up in the event of a national or international economic crisis.
Texas Governor Rick Perry says he supports a bill that would return the state's $1 billion in gold reserves, which is currently in storage by the Federal Reserve at a vault in New York -- to Texas.
"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," State Rep. Giovanni Capriglione (R-Southlake), the bill's sponsor told reporters.
Bank runs remain an ongoing fear at the island nation of Cyprus, as banks reopened for the first time since March 16. The European Union was forced to impose unprecedented austerity measures, such as confiscating money in bank accounts.
Cyprus fell into chaos while the government and European financial leaders hammered out a $13 billion emergency assistance package to keep the nation's banks from collapsing.
Outraged Cypriots took to the streets to protest an unprecedented plan to impose a confiscatory tax on all bank accounts.
There are new fears that the concerns that the crisis could spread to the U.S. financial system.
Capriglione said his bill is, "not about putting Texas on its own gold standard, [but instead will] give the state a reputation as being more financially secure in the event of a national or international financial crisis."
As Governor Perry told radio talk show host Glenn Beck last week, "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."
Capriglione's bill would establish the Texas Bullion Depository to hold the gold. "We don't want just the certificates. We want our gold. And if you're the state of Texas, you should be able to get your gold," Capriglione said.
Capriglione admits that transporting $1 billion worth of gold bars would be impractical. He suggests selling the gold and repurchasing it in Texas.
State Sen. Rodney Ellis, D-Houston, called the bill "an interesting concept" and wants to consult financial experts on its merits.
That bipartisan support may stem from the severity of the crisis in Europe and fears it could spread here.
© 2014 - Distributed by THE NEWS CONSORTIUM
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