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UT’s $1 Billion Dollar Gold Buy
Apr 18, 20110 Comments
Exclusive Gold Update |Michael Byrd, Editor |The Austin Report
In one of the most remarkable turn of events in Gold history, the University of Texas endowment fund managers announced they have taken delivery of $1 Billion Dollars worth of physical Gold!
UT took delivery of 6,643 actual bars of Gold Bullion, or 664,300 ounces– a quite unusual transaction for any university, one that may set a trend for soaring physical Gold demand in 2011. Note that the investment was not in a Gold ETF or individual Gold mining shares or in Gold futures– but in real, physical Gold Bars. This is exactly the approach the Austin Report has repeatedly recommended to our readers– take possession of your Gold.
Moving 5% into Physical Gold
On Friday, Gold prices hit an all-time high of $1,486 an ounce as the University of Texas Investment Management Co., revealed that 5% of its $19.9 Billion endowment was in actual bars of Gold bullion in a New York bank vault. Yes, 5% of their total assets was moved into Gold.
Well over a year ago, The Austin Report predicted waves of institutional demand were still ahead, demand that would move Gold prices to new levels. Our opinions were based on the research of Shayne McGuire and his latest Gold book, “Hard Money, Taking Gold to a Higher Investment Level.” Shayne is convinced that institutional money, who traditionally owned far less than 1% of their assets in Gold, would eventually be forced to double their ownership of Gold as a hedge for their Stocks, Bonds, and U.S. Dollar investments. He’s often told us that when that day arrived, it would mark a new era for Gold and $10,000 an ounce Gold would not be out of the realm of possibility. (He’s not forecasting $10,000 Gold, but saying it’s time to consider the real possibility that the value of the Dollar may fall precipitously.)
Remember, these are not “Gold Dealers” or “Gold Bugs” or “End-of-the-World Gold Buyers”. These are some of the smartest money managers on the planet who see Gold as the safest place to park their money as an insurance policy against inflation and the debasing of the U.S. Dollar. Institutional money stepping up to buy Gold right now are willing to move in at the $1,500 an ounce price level.
A New Monetary System Coming
The University of Texas’ $1 Billion Dollar bet is a clear indication to us at the Austin Report that the world may be on the verge of ushering in an entirely new monetary system. The U.S. Federal Debt has spiraled out of control and the Federal Reserve continues to print new, almost infinite amounts of paper dollars, inflating away Americans buying power.
Just as central banks in China, India, Russia and many other nations view Gold as a monetary reserve protection against the falling dollar. Major academic institutions and state retirement funds are looking for new asset classes like precious metals and commodities to produce returns that can be put to work as a source of funds for college operating expenses and retirement.
Gold as the Ultimate Hedge
The University of Texas decision to own 5% of their assets in Gold was influenced by a successful hedge fund manager in Dallas, Kyle Bass, who made a fortune shorting sub-prime mortgage securities on the eve of the financial crisis. Kyle Bass is a personal friend of staff members of the Austin Rare Coins & Bullion and his insights have been extremely valuable to us in forecasting the recent rise in both Gold and Silver.
Mr. Bass is on the Texas endowment’s board of directors, and reflects the view of several leading hedge fund managers such as George Soros, John Paulson, and Gold enthusiasts Frank Giustra and Thomas Kaplan.
Bass was quoted on Friday explaining that “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. I look at Gold as just another currency that they can’t print any more of.”
Gold Poised for an Outbreak
Our opinion is that this latest move by the University of Texas will give many institutional money managers the confidence to dramatically increase their holdings in Gold. A core holding of no less than 5% in Gold may soon be the norm for many institutional investment managers and retirement funds.
If you personally own no Gold, there’s still time to protect your life savings and profit handsomely from the next wave of soaring institutional investor demand and rising Gold prices.