Texas lawmakers who voted in June to create a state-run gold depository beyond the reach of the federal government left the state comptroller's office with a small problem: where do they store the gold and how do they pay to have the facility built and secured.
According to the Associated Press, lawmakers in Texas rushed through a bill to repatriate the state's $1 billion in gold bullion held by the Federal Reserve in New York but failed to make plans for what to do with it when it returned to the Lone Star state.
As written, the law doesn't specify where the depository would be located or how it should be built and secured. Additionally no funding was allocated for building the high security facility or leasing temporary storage space for the precious metal until the new facility becomes operational.
"We are honestly at the phase where the questions we are answering are creating more questions that we have to answer," said Chris Bryan, a comptroller's office spokesman.
Republican state Rep. Rep. Giovanni Capriglione, a former tea party organizer from the Dallas who authored the gold bill and believes it is important for Texas to have its gold close at hand, wants private companies to bid on creating the depository in exchange for charging storage and service fees.
Edwin Truman, a senior fellow at the Washington-based Peterson Institute for International Economics who has written about gold and monetary policy is skeptical.
"Just moving it would be pretty expensive and, unless Texas is anticipating withdrawing from the union, which I suspect is some peoples' want, I don't see what advantage it is,"he said.
Texas' state-owned gold is held by the University of Texas Investment Management Company -- the nation's second largest academic endowment behind Harvard -- which has been amassing gold futures since 2009 as a hedge against currency weakness. It eventually transitioned to physical bullion, and by 2011 had $1 billion worth.
Asked about the lack of actual plans for the new depository, Chief Executive Officer Bruce Zimmerman said, "We don't do politics. We're just investors."