Posted on 04/16/2011 5:15:45 PM PDT by The Magical Mischief Tour
Tipping points are funny: for years, decades, even centuries, the conditions for an event to occur may be ripe yet nothing happens. Then, in an instant, a shift occurs, whether its is due a change in conventional wisdom, due to an exogenous event or due to something completely inexplicable. That event, colloquially called a black swan in recent years, changes the prevalent perception of reality in a moment. This past week, we were seeing the effect of a tipping point in process, with gold prices rising to new all time highs day after day, and the price silver literally moving in a parabolic fashion. What was missing was the cause. We now know what it is: per Bloomberg: "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." And so, the game theory of a nearly 100 year old system of monetary exchange has seen its first defector, but most certainly not last. With an entity as large as the University of Texas calling the bluff of the Comex, the Chairman, and fiat in general in roughly that order, virtually every other asset manager is now sure to follow, considering there is not nearly enough physical gold to satisfy all paper gold in existence by a factor of about 100x. The proverbial Nash equilibrium has just been broken.
(Excerpt) Read more at zerohedge.com ...
They don't have it. It's been sold, dozens of times.
The only way to own gold is to possess it physically. If there is ever a run on gold those who own gold “stock” other than mines will be screwed and those who have physical gold will be rich.
What do the Keynesians in UT’s economics department think?
But the University of Texas is not a central bank. And university trustees tend to be very conservative. So this is certainly a significant event.
If other boards of trustees start doing the same thing, it could add up pretty quickly.
Worth the read
Just how long has the University of Texas been a central bank?
I missed that memo.
I bet they can turn it into straw.
Yes, but the problem with physical gold is that it can be stolen. And counterfeited.
HOLD GOLD!
And if push comes to shove, I wouldn’t trust the owners of the NY vault.
I don't expect a run on the banks, but this is why buying gold is a bad idea. Only the real big players actually have possession of it.
It’s not huge. If others follow suit, though - and they will - it will become huge. It’s called a cascade effect in some circles, and this could be the start...
How can you take delivery when the Gold is in NY with a bunch of crooks?
Uh, is this another way for the left to launder money? There is no reason for a university to possess the gold.
Fedgov can just take it. Anytime. Leave a little paper with Obama’s sig on it.
How many divisions does UT have?
I do accept gold’s historic position as a hedge to inflation, but I do not believe that gold has an intrinsic value that approaches its financial value. Therefore, in a crisis it has no real value.
Being a bunch of sissy liberals, the only division they have is the limp-wrist division.
There are no more monster boxes of silver left to buy.
It’s getting bad out there
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