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University of Texas Takes Delivery Of $1 Billion I

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University of Texas Takes Delivery Of $1 Billion In Physical Gold | zero hedge


Tippingpoints are funny: for years, decades, even centuries, theconditions foran event to occur may be ripe yet nothing happens. Then,in an instant, ashift occurs, whether its is due a change inconventional wisdom, due toan exogenous event or due to somethingcompletely inexplicable. Thatevent, colloquially called a black swan inrecent years, changes theprevalent perception of reality in a moment.This past week, we wereseeing the effect of a tipping point in process,with gold prices risingto new all time highs day after day, and theprice of silver literallymoving in a parabolic fashion. What wasmissing was the cause. We nowknow what it is: per Bloomberg: "TheUniversity of Texas InvestmentManagement Co., the second-largest U.S.academic endowment, took deliveryof almost $1 billion in gold bullionand is storing the bars in a NewYork vault, according to the fund’sboard." And so, the game theory of anearly 100 year old system ofmonetary exchange has seen its firstdefector, but most certainly notlast. With an entity as large as theUniversity of Texas calling thebluff of the Comex, the Chairman, andfiat in general in roughly thatorder, virtually every other assetmanager is now sure to follow,considering there is not nearly enoughphysical gold to satisfy allpaper gold in existence by a factor of about100x. The proverbial Nashequilibrium has just been broken.

From Bloomberg:

Thefund, whose $19.9 billion in assets ranked it behindHarvardUniversity’s endowment as of August, according to theNationalAssociation of College and University BusinessOfficers, added about$500 million in gold investments to an existingstake last year, saidBruce Zimmerman, the endowment’s chief executiveofficer. The holdingsare worth about $987 million, based on yesterday’sclosing price of$1,486 an ounce for Comex futures.

Years from now, when historians attempt to define who may have started it all, one name may emerge...

Thedecision to turn the fund’s investment into gold bars was influencedbyKyle Bass, a Dallas hedge fund manager and member of theendowment’sboard, Zimmerman said at its annual meeting on April 14. Bass made $500million on the U.S. subprime-mortgage collapse.

“Centralbanks are printing more money than they ever have, so what’sthe valueof money in terms of purchases of goods and services,” Basssaidyesterday in a telephone interview. “I look at gold as justanothercurrency that they can’t print any more of.”

In summary -the fiat tide is now going out. And among those who willfirst beobserved swimming naked are the very same people whose fate hasbeen sovery intrinsically linked to the perpetuation of a flawedregime (and whocoined this very saying). In the meantime, hold on toyour hats: should ascramble for delivery ensue, the recent parabolicmove in variousprecious metals will seem like a dress rehearsal forwhat is about totranspire.

The only open question is who was the broker withenough gold to deliverto the UofT. We hope to find out soon enough. Wealso hope that theUofT is smart enough, and that Kyle Bass advised it,that if they aregetting "delivery" in a Comex vault in New York, thegold has likelyalready been leased out at least several times to variousentitiesdemanding paper allocations...

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