Texas University buys $500 Million in physical gold, now holds $1 Billion in gold

Yes, you read that right. A Billion dolllars. And physical gold.

www.bloomberg.com...

Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars

The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.

The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year...

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
...

It's not just the gold bugs and doomsday conspiracy theorists buying gold. It's established institutions of deep thought.

reply to post by dbriefed


Hey, ONLY Glenn Beck buys gold!

Now go out and invest in the community!

reply to post by dbriefed


so it holds just over 5% of its assests as gold - its known as portfolio divesity -hardly significant

No wonder they can afford all those great football players.

Winning! or something.

Just another sign of the rough times that lay ahead.

Funny. All my friends are into gold. I bought silver. They all kept insisting that I was stupid buying silver. Now they're all envious because I doubled my money buying silver, while they maybe made $200 an ounce, stupid me.

Aside from a couple of [notable] hedge fund managers and a few pension funds, institutional investment remains early stage - Awareness Phase. The percentage of global financial assets allocated to the precious metals space is still under 3% as opposed to approx 34% in 1980, and as we were just discussing in the 'Go Silver Go!' thread, contrary to popular misconception, the general public isn't really participating....yet - Mania Phase

Whether or not this move by U of T will prove to be the dramatic catalyst that ZH anticipates, you can bet the institutions are coming, sure as the sun rises in the East. Y'all-ready know how tiny the Gold/Silver banquet is, well, what happens to price when all that incoming capital has trouble finding a chair at the table ?

Phases of a bull market (generic)
[atsimg]http://files.abovetopsecret.com/images/member/cffcb58e2f90.jpg[/atsimg]

Here is the deal-

Do you believe that the government is going to do ANYTHING about the runaway spending?
Do you believe that the government is going to CONTINUE the runaway quantitative easing?
Do you believe that the government is going to EVER make a change in their policy?

If you answered no to all of the above questions, BUY GOLD or other PM's or other commodities.

Just for YOU, Soros is using a subsidiary to buy up grain elevator companies. HmmmmmmmDJK!

Originally posted by ignorant_ape
reply to post by dbriefed

 

so it holds just over 5% of its assets as gold - its known as portfolio divesity -hardly significant

I hope your being sarcastic.
If not, It was a wise move on there part, although I don't know how the physcal being held in a vault in New York is going to work for them. Gold is a currency and one of the oldest. Paper fiat money is a derivitive of Gold. It was once backed by gold and you could redeem your paper money for physical gold. Kind of like an IOU or a money order. If you had a savings account with fiat in it your purchasing power is diminishing by the second. If you held that savings in gold you would be preserving your purchasing power.
SO a lot of people buy gold they buy a gold certificate through an online broker. Here's the kicker if the broker has 100,000 physical bars but has 1,000,000 iou's issued and a university says i want delivery of 90,000 bars they only have 10,000 left what happens if another university attempts the same? kind of like going to the ATM and it's out of money or going to the bank and being told they don't have the money to give you.

Originally posted by OBE1
Aside from a couple of [notable] hedge fund managers and a few pension funds, institutional investment remains early stage - Awareness Phase. The percentage of global financial assets allocated to the precious metals space is still under 3% as opposed to approx 34% in 1980, and as we were just discussing in the 'Go Silver Go!' thread, contrary to popular misconception, the general public isn't really participating....yet - Mania Phase

Whether or not this move by U of T will prove to be the dramatic catalyst that ZH anticipates, you can bet the institutions are coming, sure as the sun rises in the East. Y'all-ready know how tiny the Gold/Silver banquet is, well, what happens to price when all that incoming capital has trouble finding a chair at the table ?

Phases of a bull market (generic)
[atsimg]http://files.abovetopsecret.com/images/member/cffcb58e2f90.jpg[/atsimg]

Good info OBE1 but at the end of the chart I think there is a problem. Your dealing with a different type of beast. The 3% in right now understand and recognize the true nature of gold as the only currency. Central banks are eating it up right now. When the other 97% get on board what happens.

A question for you? why is goldman recommending clients to reduce there commodity holdings during the next 3-6 months?

reply to post by alonzo730


so , um sell it all and buy gold, you can't lose

really....

Originally posted by Gtown
Good info OBE1 but at the end of the chart I think there is a problem. Your dealing with a different type of beast. The 3% in right now understand and recognize the true nature of gold as the only currency. Central banks are eating it up right now. When the other 97% get on board what happens.

Hey Gtown. If I understand correctly, please consider that we'll never have 100% of the world's population, or 100% of global financial assets invested in precious metals...forgive me if I'm stating the obvious here. But with currently under 3% of the world's investment capital supporting $1485 Gold and $43 Silver, you can imagine the potential impact of an additional 30% (1980 peak = approx 34%). Additionally, the amount of liquidity in the global financial system has expanded exponentially since 1980. A cocktail napkin estimate says a mere 8% allocation to the metals space could see prices double from existing levels....against currencies, bonds, general equities, Gold is a comparatively tiny market.

Phases of a bull market (generic)
[atsimg]http://files.abovetopsecret.com/images/member/cffcb58e2f90.jpg[/atsimg]

On the chart, the stealth phase represents the innovators (smart money like Jim Sinclair, Richard Russell, and Harry Schultz for example) - the awareness phase represents the early adopters/early majority (sophisticated retail buyers, bankers, and institutional investors like John Paulson, U of T, pension funds etc) - while the mania phase represents the late majority...or the general public chasing prices, sometimes referred to as 'dumb money' as we approach the peak and blow off (this group would comprise "the other 97%" you mentioned, though the actual percentage would be much lower). With respect to the blow off phase, the open question remains: Will this time be different ? Will Gold peak and collapse as per 1980, or will the reserve currency collapse allowing Gold to peak and trade in a narrow band after ultimately being reintroduced as a component of a reformed global monetary system ? Stay tuned for this one, and keep an eye on bucky I say.

As much as I enjoy reading ZeroHedge for it's coverage of current events, I think the editors have a penchant for the sensational, and when I read the comments section, it appears the readership is quick to gobble it up with little independent fact checking. Word of the U of T Gold investment was first publicized back in July of 2010, in other words, it's old news....

University Of Texas Invests Three Percent Of Its Funds In Gold - 07-16-10

If this purchase by U of T represents a "tipping point" bringing a flood of institutional money into the Gold market as ZH just declared, the rush would have begun last year, and the purchase would have been priced-in to the market several months ago. A cascade of institutional capital into precious metals hasn't materialized....yet....another fundamental reason why I believe this market still has long legs.

Originally posted by Gtown
A question for you? why is goldman recommending clients to reduce there commodity holdings during the next 3-6 months?

Probably for the same reason Goldman dumped gasoline futures back in 2007 just ahead of elections....

Gasoline Price Manipulation Before the Elections

A spike in commodity prices (inflation) is politically untenable, and the Obama government, just like the Bush government, is infested with connected, ex-Goldman employees including federal regulator Gary Gensler, chairman of the Commodities and Futures Trading Commission, and former 18 year Goldman Sachs employee.

Goldman Sachs's Gary Gensler

Expect any effect from this latest manipulation to be short lived as government agent Goldman Sachs backs up the commodities truck at lower prices....if they can get 'em.

GL

*Not investment advice