by Joseph P. Farrell, Giza Death Star:
Once again this website is grateful to W.G. for finding and sharing the following article about legislative bills in the state of Texas that have been introduced to make gold and silver legal tender for transactions:
With this story we have finally arrived at what I and others predicted when that state first authorized a state bullion depository, namely, that it was a necessary step in the path to asserting financial state sovereignty. Note what the article actually says:
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Two bills filed in the Texas House would create 100% backed gold and silver-backed transactional currencies that would serve as legal tender in the state. This would create a foundation for the people to undermine the Federal Reserve’s monopoly on money.
Rep. Mark Dorazio filed House Bill 1049 (HB1049) and House Bill 1056 (HB1056). The language in both bills is nearly identical but they add the provisions to different sections of the Texas code.
Under the proposed law, the Texas Comptroller would issue gold and silver specie (coins) through the Texas Bullion Depository and also establish gold and silver transactional currency defined as “the representation of gold and silver specie and bullion held in the pooled depository account.”
The Depository would be required to hold enough gold and silver to back 100 percent of the issued currency.
Holders of gold and silver specie and currency would be able to use them as “legal tender in payment of debt” in the state of Texas. The gold and silver-backed currency would be electronically transferable to another person.
Gold and silver-backed currency would be redeemable in specie or at the spot price of gold in U.S. dollars minus applicable fees.
In practice, the passage of HB1049 or HB1056 would allow any person to conduct business transactions using gold or silver.
The passage of this legislation would create a sound money alternative to U.S. dollars in both physical and electronic form.
Using gold and silver-backed transactional currency, any person or entity would be able to do business using a debit card that seamlessly converts gold and silver to fiat currency in the background. Private individuals and businesses would be able to purchase goods and services using assets held in the Texas Gold Depository in the same way they use dollars held in a bank today.
Note carefully that the bills provide for “the representation of gold and silver and bullion held in the pooled depository account.” This is the final step that, again, I and others have long argued must be the inevitable result if Texas was serious about its bullion depository, namely, that “gold” and “silver certificates” would and could be issued on those holdings and those certificates in turn could be used as media of exchange in conducting transactions. Notably, the Texas provision also allows the electronic means of transaction.
Needless to say, I’m entirely for the actual physical certificates, and very much against the electronic version. Physical certificates provide more anonymity and privacy, electronic debit cards do not. Texas needs to clarify and stipulate that any such physical certificates must always be honored, and must always be convertible (which the bill appears to do).
Additionally, we may expect similar measures from other states, including inter-state measures recognizing other state’s currency.
It is this last question that raises a significant question, a question which I’ve previously raised in connection to state bullion depositories and state specie currency resolutions: why are states, and particularly Texas, doing this? To my mind there has always been a political and geopolitical calculation in Texas’s moves, a calculation revealed by that State’s governor’s attempt to woo various stock exchange data centers – the NASDAQ in particular – away from the New York City area and to Texas. Wooing the data center is tantamount – in these algorithmic trading days – to wooing the exchange itself. Texas has already opened its own stock exchange in the Dallas-Fort Worth metroplex, and if any of the more established equity or commodity exchanges move to that state, or if the Texas exchange grows to be competition, then we’ll know a game is afoot, a geopolitical game.
In previous blogs I offered the speculation that the Texas stock exchange seemed to presage a “Latin American turn” in business and financial orientation. This was before Mr. Trump’s recent re-election and nomination of Cuban-American Florida U.S. Senator Marco Rubio to the position of Secretary of State, a move that seems condign to my previous speculation.
But there is a deeper and far more speculative reason I think these moves must be watched, and that is that not only does there exist a “federal level” deep state, but that each state also has its own “state level deep state” and those “state deep states” have, in my opinion, taken a very different assessment of the long term future prospects of the federal union, and that they are seeing deep fissures and fault lines that could potentially lead to a crack-up, and are taking appropriate long term steps for the ability to continue international trade in that event. And that trade, as the American experience in the War Between the States showed, required bullion to conduct and clear international trade, and this was true both for the Union and for the Confederacy. Texas is saying, in effect, that with, or without, the federal government cesspool in Swampington, DC., that it intends to be able to continue to conduct domestic and foreign trade.
There is, however, a strong caveat looming over all of this, and that is the bullion trap itself. Is there enough bullion to sustain such trade without severe deflationary pressure? All my intuition says there is not. Not without some sort of supplemental fiat response, one hopefully by-passing the experiments of Mr. Lincoln and Mr. Davis, and backed by something real, namely, actual production and commodities.
