Texas University Sells $375 Million in Gold Bars…to Re-Invest in Gold Futures!

jump into fireTwo years ago, Texas University shocked the gold community by taking delivery of $1 billion in physical gold from the COMEX, under the guidance of Texan hedge fund titan Kyle Bass.
Bloomberg reports this morning that the University’s Endowment fund has just liquidated $375 million of its physical gold position over the past 3 months, and will plow the proceeds…back into the PAPER GOLD FUTURES MARKET (along with general equities).
Nothing like identifying a coming trend and getting out of Dodge in time…just to come running back and jump into the fire when the game actually starts heating up!
Somehow we suspect that Mr. Bass was not consulted on the University’s latest financial decision…

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As Bloomberg reports:

The University of Texas Investment Management Co., the third-largest U.S. academic endowment, sold $375 million in gold bars from holdings of about $1.4 billion and reinvested the proceeds in gold futures and equities.

In the three months that ended Feb. 28, the Austin, Texas- based fund bought $75 million in gold futures, $225 million in developed-market equities and $75 million in emerging-market equity futures, Bruce Zimmerman, the chief executive officer, said yesterday in a telephone interview.
The fund, which manages $29.2 billion, started taking delivery of gold through futures starting in 2008 as a hedge against inflation, Zimmerman said. While fund managers and directors remain concerned global consumer prices may increase, the fund wanted to increase investments in equities, he said.

 

At least the fund sold their bullion holdings prior to the last month’s take-down in gold:

The fund hasn’t bought or sold gold since February, he said. Its gold holdings are now valued at about $1.1 billion, while its cost basis is $967 million, he said.

 

We are sure our bullion banking friends were more than happy to get their hands on $375 million of Texas’ PHYSICAL gold and immediately re-hypothecated it into several $billion in “gold”.

Comments

  1. Did they ever take physical possession in the first place?   I doubt if the gold ever left NY and went to Texas, so what difference does it make what they do.
    As long as many central banks and investors don’t take physical possession of their gold and silver, the paper game goes on and on.

    •  I agree that there has never been any confirmation of physical delivery, and I doubt that there ever will be.
       That billion dollars that Texas invested was stolen, plain and simple. Texas is just doing what it can now in an attempt to cut their losses.
       In the end, they will probably be wiped out anyway.
       They really need to pay more attention to who their dealing with, they should know by now that there is no legal recourse for the theft and fraud.

    • @zman
      Yes, UTIMCO took delivery of the bars but had them vaulted in NYC.  Did UTIMCO take physical custody?  No, because they don’t have the vault and infrastructure to protect the bars.  They did have them in “allocated” form however in NYC and they were advised three years ago to relocate the physical into the state of Texas.

    • “Did UTIMCO take physical custody?  No, because they don’t have the vault and infrastructure to protect the bars.”
       
      Gee… like they can’t rent some space in a local bank vault and then insure it?

  2. Why the **** would they do that? Is selling low is the new genius plan for wealth creation?

  3. Ming Chu and Harpinger Guresh thank them most graciously. Whoever made this decision should be fired, whoever gave the person the advice to make that decision should be hanged.

  4. So they were presumably long futures in Feb, just in time for mid-April’s crash. Genius.

  5. Trying to better ‘Brown’s Bottom’?
    They did sell just before the drop though, sounds like good old insider information, maybe another big final smackdown on the way and they will buy back in once they get the insider info again?

    • Assuming they put a good chunk in equities (except for mining :) ) and they can revert to physical now (huge assumption) I could still turn out to be a good trade… but again, those are pretty wild assumptions.

  6. Well that was stupid, lol, ok, give it to us.

  7. it gives it a new meaning to texas hold up.  i gues the fertilizer explosion was a warning shot.

    • I have been thinking about that. now that there are drones keeping sunlight away from the USA…

      A well-selected missile could come in dead vertically, perhaps mach 2, either thrusters on or already off. Specially prepared missile, small but furious. Anyway, with the fire already blazing, that big blast…no-one would notice the missile. It would not even show up in high-speed footage probably. About the perfect false flag.
      Even if the missile had its own sonicc boom, this would not register due to the blast. No-one would see or hear the missile.

      It’s possible it was an honest accident and coincidence, but in the how recent event, truth usually won of conspiracy. The Saudi “person of interest” apparently visited the Obama’s 6x at the White House. Now come on… 

  8. Hmmmm   Waco WAS the warning shot. Texas U did not take delivery?  That should not be surpriseing even if they had a plan to store it under the football field or something like that.
      Why did the TX Gov tell the Fed to return the phyzz?  For the Same reason that everyone who has a clue, from individuals to banks.
    If you don’t hold it you don’t own it. 
    ABM AMRO (BAN MOAR) Gold fired one of the most obvious blasts when they said
    “No Phyzz Silly Wabbits, we’ll pay you in lettuce”
    Now pretty much every bullion bank is getting the same message. Pay me my silver and gold now! 
    fat chance on that one 
    That’s Fat Gong Choi!
     

  9. I’m sure they are planning to buy futures, announce their intention to take delivery, and thereby proceed to crash the comex.
     

    • there is a good chance the position limits would make that impossible, and I believe David Morgan stated that contractually the comex can cash settle. The Crimex is literally a corrupt casino. It is unbelievable, it is truthfully a corrput casino which dictates spot price, and the worst part is, a fraction of the metal is traded there, yet we are under the jackboot of their corrupt pricing.

    • Not only can the COMEX settle with cash, they can also settle with GLD shares. 

    • OK sir, you can have cash, or a coupon which is redeemable for cash LOL!

  10. Sonny Corleone- 
    “That’s really stupid. You go to college to get stupid?”
    Duuh.

    • Fredo Corleone: I can handle things, I’m smart, not like everybody says!


    • You just had to post that, didn’t you?  Now I want to watch the whole trilogy again.  :-)

      People diss God Father III but I happen to like it because it has very close ties to the real world Banco Ambrosiano bank scandal.
       

  11. CDL Correct statement
    We are under their corrupt
    spot to physical price  gapping will make them as irrelevant at 8 track tapes.  Not sure when but it will happen and is happening elsewhere

  12. Yeah, when I read this story I just kinda scratched my head. It’s like running the table in pool, and then scratching on the eight ball. Just doing their fiduciary responsibility I’m sure /sarc off.

  13. For those that don’t comprehend Texas, Austin is a island of liberal dumbass unto itself and distant from most of the state’s thinking.  Whomever the educated idiot was who made this decision should be tied to a horse with a cactus under the saddle!
    Perry to his credit wants the physical……………..

    • “Whomever the educated idiot was who made this decision should be tied to a horse with a cactus under the saddle!”
       
      Nah, just tie his ankles to a horse’s saddle and spook the horse through a cactus patch.  lol
       

  14. What a bad idea !
     
    Amazingly bad. Someone should get hung for this.

  15. I just re-read the Bloomberg story and realized I missed the part about their last transaction having taken place in Feb. That makes my speculation very unlikely so I deleted the post.

  16. Just thought of something, is it possible that the University has already bought the paper gold and that it is responsible for the climb from $1400 to $1464?  We know paper moves paper, so I guess it could be possible.

  17. I wonder how much kickback Mr. Bass received? In Paper of course.  Lol

    • Bass is a VERY smart guy.  I agree with the poster above who said that he probably was not consulted prior to this move.
       

  18. They deserve some hefty margin hikes for that choice. And with a short squeeze possibly coming up that could be expensive for them. No more gold back educations. Wouldn’t want to be in-doc-trinates in contemporary USA anyway….

  19. The did not just liquidate.  They finished liquidating $375MM worth by end of Feb.
    “Three months that ended Feb. 28″

  20. TX Univ. in mad….i cant believe…

  21. I hope like hell they don’t teach economics and investing…

    • Only the best Keynesian courses, of course.  They can point to this move as a sterling example of that kind of intelligence.
       
      /sarc/off
       

  22. It is their money. I seriously doubt they are not as smart as Sprott. The equity markets are going up for the foreseeable future. I have 300k in equities. Maybe when I sell high, I will buy a LCD or bullion web site along the way and retire…in 2024. PM’s will stay put till then and weak hands will get weaker.

  23. Now THIS is metal!
     

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