Little Help Here?

GoldbugSomething tells me that this isn’t a good idea.

Something tells me that this might not strictly kosher from a legal perspective.

But I can’t quite define why I think that. Maybe there’s nothing particularly wrong with this idea and I’m just wary for no good reason.

Any thoughts, folks?

 

Image: modified from original by John D. Bert found at wikimedia commons.

 

Burt LikkoBurt Likko is the pseudonym of an attorney in Southern California. His interests include Constitutional law with a special interest in law relating to the concept of separation of church and state, cooking, good wine, and bad science fiction movies. Follow his sporadic Tweets at @burtlikko, and his Flipboard at Burt Likko.

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42 thoughts on “Little Help Here?

  1. Ok, Giovanni Capriglione (now that’s a Texas name if I ever heard one) is described as a private equity manager. Also involved are Peter Schiff, a hedge fund operator, and Kyle Bass, a hedge fund manager.

    Given that, I’m thinking, what’s in it for them? How are they going to make money this way?

    I think the answer is two-fold. They will probably run some of the “outsourced” services that the depository requires. But more importantly for them, it will give them a way to sell (or perhaps rent, and slice off a transaction fee) their gold to rubes who think that gold is sacred and has timeless value.

    I expect that, despite all their bluster, none of them think that gold is a more solid basis for currency than fiat money. That’s just their sales pitch, and how they are set to sell their metals to a greater fool. And that greater fool would appear to be the government of Texas. Because Abbot, and many of the voters of Texas are that dumb. Or rather than dumb, maybe I should say that they are irrationally suspicious of New York and Wall Street.

    The real irony here is that anger with New York and Wall Street that many Texans (and Californians like you and me, Bert!) feel is justified precisely by the sort of thing that Capriglione, Schiff and Bass are pulling off here.

    I think it’s almost certain to be legal. My experience is that most operators at that level have a very, very good working knowledge of the rules, and how best to exploit them for their own purposes. But it’s a terrible idea for the state of Texas, which is precisely what makes it a great idea for the gold sellers.

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    • Seems like you’re on the money about Capriglione: “before his second term began, he set about re-designing the depository bill to outsource many of those more expensive functions to the private sector. Although the depository is performing the same functions in the new law as it had in the older version of Capriglione’s bill, shifting the execution to private contractors yielded a so-called “fiscal note” in the legislature that calculated an “indeterminate fiscal impact to the state.” Because it’s outsourced rather than run by state employees, it is no longer counted as a concrete expense in the state budget.”

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  2. All dupes…all of them….why would they bring their gold to a state targeted by Operation Jade Helm!!!! It’s a 13 level chess move by Obama through his double secret hidden operatives. Wake up Sheeple.

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  3. Wow, that’s awesome. Texas is picking up right where Bitcoin left off, creating their own currency system outside fedrul control. Or maybe not. Seems like, for starters, Abbott is wrong about keeping taxpayer funds from leaving Texas. I don’t think taxes work that way (all picky and choosy), so it seems to me that that rationale can be disgarded. Apart from that …. beats me. What provision in the Constitution or subsequent Act prohibits a state from creating its own currency or establishing a state-centered banking system? I, of course!, don’t know.

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    • As a Texan, I think I’m gonna keep using regular dollars.

      As a cynical man, I think Doctor Jay is right — this is a bunch of private business folks using goldbug paranoid to make money off of idiots.

      The high finance version of Glenn Beck’s “buy gold!” promotions. You know the high finance guys always have to top any scam…

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  4. Hey Texas, good luck getting your gold. There is no gold in fort knox and odds are that HSBC transferred that gold to third or fourth or fifth parties long ago. Lots of shady actions going on in the physical gold arena.

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  5. The major question I would have is, what disaster is Texas preparing for here? It needs to happen quickly enough that precautions have to be taken well in advance, bad enough that the US dollar loses much of its value, but not so bad that gold loses its value. That’s a pretty narrow window of catastrophe Texas is trying to fly through.

    The big advantage of gold as a disaster hedge is that it is worth a lot of money for its size and weight (for now, anyway) so its a good choice if you think your government is going to go feral on you and you might need to run away. This is not really an advantage that an entire state can count on, especially if the gold is centrally warehoused.

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  6. The paradox overlooked by most survivalists is that in actual empirical cases of disasters, it isn’t a hoard of gold or even rice or guns that allows survivors to prosper, but having a network of allies and trusted partners.

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    • Yeah, you gotta have someone to watch your fucking back after armageddon. You’re going to have to sleep sometime, folks. Guns can’t protect you while you’re sleeping (bombs can, a decent fortress can).

      Luckily, we got decent neighbors.

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