One Billion in Gold Bullion for the University of Texas

Email Print
FacebookTwitterShare

Recently by Robert Wenzel: How Fed Buying of Long Term Assets Could Lead to Wild Inflationary/Deflationary Swings and Perhaps Fed Bankruptcy

     

This is going to cause a few more people to take a look at gold as an investment. (And make overseas investors even more nervous about the dollar)

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, reports Bloomberg.

The decision to turn the fund’s investment into gold bars was influenced, according to Bloomberg, by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said yesterday at its annual meeting. 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 today in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”

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, last year added about $500 million in gold investments to an existing stake, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings reached about $987 million yesterday, as Comex futures closed at $1,486 an ounce.

The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC Holdings Plc, the London-based bank, according to a report distributed at yesterday’s meeting in Austin.

Contrast this investment against the trades made by Harvard under the then-guidance of former Obama advisor Larry Summers, where Harvard’s derivative trading resulted in billions in losses.

Reprinted with permission from the Economic Policy Journal.

2011 Economic Policy Journal

The Best of Robert Wenzel

Email Print
FacebookTwitterShare