The University of Texas just took delivery of 33 tons of gold, which according to World Gold Council statistics and the International Monetary Fund list of countries – gold holdings, would put UT at No. 49 in the world, just behind the country of Brazil.
The keyword phrase here is ‘took delivery‘.
According to Bloomberg and a report from Business Insider, the University of Texas has added $500 million to its already sizable gold investment in 2010, partially due to the influence of hedge funder Kyle Bass, who sits on the university’s endowment board. Bass has previously said “all roads lead to gold,” and questions the value of the dollar, or any currency, in this environment where central banks continue to print money.
The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC, a London-based bank.
The $1 Billion gold position apparently represents 5 percent asset value of the total fund, which is not itself a surprising move, however the decision to take delivery of physical gold versus holding paper asset gold may be a tipping point in which the race begins among other major funds for physical gold allocation and a race to ‘have more than the next guy’.
Clearly, this is a significant sign of the increasing loss of faith in the value of the U.S. dollar. This first major defection could potentially be serious enough to destabilize the already precarious financial power structure.
It has become increasingly obvious that there is not anywhere near enough physical gold inventory to represent all paper gold in existence today, and no doubt that many other asset managers will likely follow the lead of UT in acquiring more of their own.
As the battle for physical gold gets under way, we will likely see an increasing spread between the price of physical versus paper gold.
The pace at which the system collapse is occurring, is quickening. Standard & Poor’s just lowered its outlook for America’s long-term credit rating to ‘negative’. $4+ gas is back. Food and energy prices up. Gold and Silver are skyrocketing, reflecting the ongoing devaluation of the dollar and loss of confidence thereof.
The UT gold delivery may be a waterfall moment, the tipping point which will be seen in the rear view mirror as the acceleration of fiat collapse continues.
Interesting gold fact…
The $1 Billion of physical gold taken by the University of Texas, at today’s price is about the size of a cube just over 3 feet on a side, and weighs about 20 tons.
A total of 165,000 tonnes of gold have been mined in all of human history, as of 2009.
All the gold in the world if assembled together would only measure a cube of 67 feet on a side.
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