A Golden Tipping Point: University of Texas Takes Delivery Of $1 Billion In Physical Gold

Tyler Durden's picture

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 of 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.

From Bloomberg:

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, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing 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...

The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.

“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.”

In summary - the fiat tide is now going out. And among those who will first be
observed swimming naked are the very same people whose fate has been so
very intrinsically linked to the perpetuation of a flawed regime (and
who coined this very saying). In the meantime, hold on to your hats: should a scramble for delivery ensue, the recent parabolic move in various precious metals will seem like a dress rehearsal for what is about to transpire.

The only open question is who was the broker with enough gold to deliver to the UofT. We hope to find out soon enough. We also hope that the UofT is smart enough, and that Kyle Bass advised it, that if they are getting "delivery" in a Comex vault in New York, the gold has likely already been leased out at least several times to various entities demanding paper allocations...

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Muir's picture


Missing_Link's picture

Hooray for UT!  I'm proud of y'all.

Popo's picture

Wait. The University of Texas has a billion dollars worth of physical gold?

Hory shit

Michael's picture

LMAO at the Bernank and the JP Morgue.

Pegasus Muse's picture

Hook'em Horns!  They need to get that bullion the hell out of nyc to a nice secure vault in the Republic of Texas. 

Blano's picture

No doubt.

Given the general disdain NYers have for Texas (see Schumer's comments about Houston and the space shuttle) UT needs to get that stuff a lot closer to home.

Tejano's picture

I'd say, "The feeling is mutual", but "disdain" doesn't quite get it - not by a long shot.

SWRichmond's picture

I agree.  There has to be someplace in Texas to keep this.  Maybe their actually moving it to Texas will be the harbinger of secession.

Robot Traders Mom's picture

Hopefully we can be the first to buck the system. This is a big fucking deal. Hook 'em!!!

CrazyCooter's picture

I have multiple blood relatives with finance degrees from UT and multiple friends with finance degrees from UT.

I am making it a point to ensure they all know about this.

The math isn't hard.




Hey Cooter, 

     Who do you sell your gold to when it's $5,000/oz?

spiral_eyes's picture

people who need to eat. merchants won't take crappy paper or electronic paper. there will be a boatload of people willing to exchange the deeds on their land and real estate for money (i.e. gold).

Raynja's picture

Wrong question, at $5000/oz there would have to be huge demand to maintain that price.  The question is, what do you trade your gold for?

Dan The Man's picture


I think you should just hang on to it until the dust settles...trade it in AFTER the new currency starts up...(or after the war


I think it gives you the best exchange point....shit, when IS the best exchange point?

WaterWings's picture

It depends on the counterparty. If you go to the market you'll get the spot, in fiat currency. Private exchanges could be much, much, much more "lucrative" depending on the desperation of the buyer and what assets they offer. 

Pumpkin's picture

I know this one!  Some one much smarter than you.

bulldung's picture

You can't put a number on it. William Buckler in The Privateer has suggested that you keep PM until they are used for money. I think I will use PM as a temporary store of value redeeming it only when I need to acquire some good or service as a form of money or to pay a price agreed upon before I redeem for fiat money. At this point we may be pre bubble dynamics, but this news gives PM buying credibility that may drive PM into speculative bubble type buying.

pan-the-ist's picture

SW, that might be the first time you've ever chosen the wrong "there", but I am going to point it out cuz I'm a feeling like being a jerk.

That being said, I don't know the total value of the assets they manage, but that is a huge bet.

Selah's picture


"their", not "there"

Grammar Gestapo is a difficult job...


Blanche DuBois's picture

Wrong too...should be "they are" or "they're"...I'm feelin' like being a bigger jerk! ;~>

IslandMan's picture


No, it should be "their".


Their moving the gold is a good idea. i.e. the moving (by them) is a good idea.


They are moving the gold.

But you can't say :

They're moving the gold is a good idea.

Blanche DuBois's picture

No, "They are actually moving the gold to Texas" Or "They're actually ... (the contraction of they are)

Temporalist's picture

It is not "they are," it is their as in "their future action of moving the gold may be the harbinger...etc."

Blanche DuBois's picture

No, no, no! "they" in this context is a pronoun, not a possessive pronoun...future action is irrelevant in this case. Sorry, but that's the fact!
;~>. Just sayin'...

Temporalist's picture

The future had nothing to do with it.  You are just reading it wrong.  It is not They Are.  Read the sentence with they are..."Maybe they are actually moving it will be the harbinger..."  doesn't make sense.  "Maybe their action of actually moving it will be the harbinger..." makes sense.  Actually the actually just gets in the way so if it helps you:  "Maybe they are moving it will be the harbinger" or "Maybe their action of moving it will be the harbinger." 

malusDiaz's picture

Maybe their moving is the herald (of the gold movements) Kry!

i-dog's picture

Blanche, you're an obstinate idiot. Read the whole sentence and you'll see that SWR and Temporalist are correct. The sentence already has a verb: "will be".

Stormdancer's picture

My daughter had an English teacher like Blanche once.  I thought I was going to have to make her eat a Holt Handbook page by page, but she did finally correct the grade...after going two levels over her head.  Arrogant bitch....couldn't teach English and refused to admit it.

eaglefalcon's picture

"Maybe their actually moving it to Texas will be the harbinger of secession."


This sentence doesn't sound very stylish, but is grammatically correct nonetheless.  Maybe he meant to say:

"The fact that they are actually moving it to Texas is the the harbinger of session" or

"That they are actually moving it to Texas is the harbinger of session"

Regarding "their moving", "moving" here functions as a "gerundium" (a verbal noun) instead of a verb in present participle form.  This verbal noun follows the possessive pronoun "their".  In this case "their moving it to Texas" is equivalent to "their movement of gold to Texas"

The heck with grammar!  I like what a Texan would say: "THEM moving it to Texas would be a harbinger of session"  Ain't it great

IslandMan's picture


Thank you, eaglefalcon, that's exactly correct !

Finally, someone(else) knows some English grammar.

Bendromeda Strain's picture

Hang around ZH long enough and you'll come to realize that SW is rarely if ever wrong about anything. Kind of like Kyle Bass...

bbq on whitehouse lawn's picture

That the're moving gold to real, is'n a right good'n id'er. Now if'n them teach'r money be want'n to trust them there New York typ's; wit'n their gold. Well'n don't seem, as i can tell it to be, a right good choice. But, that is'n just'a me think'n out loud.

JohnnyCrash's picture

Dude, you're thinking of the Beverly Hillbillies. Try "King of the Hill" for Central Texas patois.

I'll tell you whut.

nmewn's picture

Dang ole internet thing...clickety click click click...yup.

glenlloyd's picture

the article says 19.9 billion in assets...did you read it?

juangrande's picture

The story goes that at the turn of the 20th century or thereabouts, U of T was swindled out of some prime east Texas timberlands. In return, they received acreage in the west Texas desert. That desert was the Permian Basin. The largest oil find of its day!

pops's picture

"Their" is correct.

Your welcome....;-D



TerraHertz's picture

Grammar wars, gotta love 'em.

But it IS 'their', because 'moving the gold to Texas' is a hypothetical future tense, since they are NOT currently planning to do so. Forget grammar errors, the real mistake here is choosing to store the gold in a NYC vault.  I wonder if that would be some recently opened JPMorgue bullion vault? One with convenient clandestine moving truck access tunnels, like the basement vaults of the WTC? A billion dollars in gold - hey, that's probably worth staging another 'terrorist attack' for.

I suspect the University of Texas is thinking with vastly insufficient paranoia, and haven't quite grokked this whole 'precious metals for preservation of wealth against government assaults and outright theft' survivalist thing.

But what do I care about their conceptual handicaps. Picked up a nice 12Kg of physical today; no suspect NYC vault involved. Almost enough to lift the pall of Fukushima gloom for a while. Almost.



Scottj88's picture

So the University of Texas now has more gold than Fort Knox?

jplotinus's picture

The desire to have "more gold than thou" may be the crux of the tipping point.  If UT has spawned a race to acquire gold, and to do so on an American sectional/factional basis no less, then, in that event, financial infighting could become so intense as to threaten oligarchical control.  This is potentially serious precisely because it might destabilize the already tenuous financial power structure.

Here's a series of cryptic suggestions to President Obama:

1--Fire Bernanke;

2--Have Justice Department to indict those responsible for mortgage fraud;

3--Bring warring in Afghanistan, Iraq and Libya to an immediate halt;

4--Ration and control price of petroleum products; and

5--Double Secret Service protection.

Absent presidential leadership, the race to hoard PMs amidst the overall fog and deception of stupid wars and blatant financial manipulation might cause worldwide turmoil before the Mayan Calendar can  do its number.  Sheesh, at this rate, we won't even make it to 2012 doom.

Uncle Remus's picture

5--Double Secret Service protection.

Might be better off with some bow-tied NoI krew.


Jus' sayin'.

sun tzu's picture

Rationing and price controls have a great history of working LOL

Klaus Daimler's picture

Dude, if you've been handling your philharmonics lately, you've probably got more gold in your fingerprints than Ft Knox contains.

mayhem_korner's picture

We'll know the locale pretty quick - it'll be the one with a busload of ten-gallon hats "visiting" the future United States of Texas' embassy to the Occupied North. 

What fun!

Southern Grey's picture

You know the ditty..."The eyes of Texas are upon you"... I wouldn't leave anything of value in New York much less a cool $1 Billion in shiny gold bars.

jplotinus's picture

When it was announced that France was leading the invasion of Libya, a ZHer (don't remember who) said, and I quote:

"This will end well."

So it is here.  With UT 1) taking possession of physical gold; and, 2) parking it in NY;, not only do we have playing out before us the dynamics of financial system collapse, we also have, in no particular order;

a) A rekindling of Civil War antagonisms; and

b) Open, indirect conflict between Fed branches (Dallas - NY).

So, indeed, this will end well.