Texas Builds Its Own Fort Knox

According to the Austin Business Journal, construction is underway for a permanent building for the Texas Bullion Depository.  The Depository was created by the State of Texas is an alternative to Federal Reserve storage of gold, silver, platinum and other precious metals.  Deposits are overseen by the Texas Comptroller for Public Accounts. 

The initial facility will be 40,000 square foot, enough to store about $350 billion in precious metals.  There are plans to more than double the facility if there is a market.  Texas is trying to encourage large institutional investors in the state, like the University of Texas system, to move their precious metals holdings from The Fed to the state depository.  Currently any U.S. citizen, resident or corporation can open an account and store precious metals at the Depository.   

This is an interesting move by Texas.  According to Gregg Abbott,  the Texas Governor who signed the bill creating the Texas Bullion Depository, the Depository's purpose is "... increasing the security and stability of our gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store gold in facilities outside of our state."  It will be interesting to see if other states follow in establishing precious metal depositories.  It will also be interesting to see if the Federal Reserve pushes back if Texas starts to get a significant amount of their deposits.