The Texas Bullion Depository is the state’s plan to build something like its own version of Fort Knox – it would be the first state-administered gold bullion depository in the nation. It’s now one step closer to becoming a reality. State Comptroller Glenn Hegar announced Wednesday that a private company, Lone Star Tangible Assets, has been tapped to run the depository.
The intention, as advocated by Hegar and approved by the legislature, is that Texas-owned gold would be moved from its current home in New York to a secure facility in Texas.
Ray Perryman, president of the Waco-based economic research and analysis firm the Perryman Group, says hiring a manager for the depository doesn’t mean Texas gold will actually be moving home.
“The gold everyone talks about is actually about $800 million in gold investments that the University of Texas has held in a bank in New York,” Perryman says.
In order to invest and trade that amount of gold, it must be held by an institution that is a member of COMEX, a market that facilitates the buying, selling and transfer of gold bullion. The university’s assets are held in a COMEX member bank, but the new Texas depository is not a COMEX member, meaning the gold cannot be transferred to the Texas facility.
“As a practical matter, this is not Texas gold in the sense some people may think of it,” Perryman says. “It’s an investable asset of the University of Texas, and obviously, to be good stewards of the resources, they need to have the liquidity to hold a fixed asset of this nature. And to do that, you have to be a COMEX member.”
The impetus behind the gold depository was not only to repatriate gold belonging to Texas institutions, but to give individual Texans the option to store their bullion closer to home. Perryman says the depository could eventually grow to the point that it could become a part of COMEX, but he doubts it.
“That’s frankly a pretty far-fetched notion,” Perryman says. “But a lot of things in the world have happened on pretty far-fetched notions.”
Written by Shelly Brisbin.