With gold closing at new all-time highs and silver closing at new multi-decade highs, today King World News received word from legendary Pierre Lassonde, former CEO of Newmont Mining, that Texas University now holds $1 billion worth of gold bars. Lassonde stated, “This is another turning point in the gold market. It’s the first large institutional holding of gold and they are quite public about it.
Pierre Lassonde continues:
“We would expect many others to follow as they are basically lemmings directed by the many consultants who 10 years ago told them not to bother with gold at $250 an ounce, but can’t wait to get them in at $1,400 an ounce! God bless, this gold market is going higher.”
Because Pierre is connected at the highest levels he has always been without question the best Chairman and CEO at predicting directional movements in the gold price. I take very seriously that Pierre is saying this will bring serious fund flows into the gold sector. My guess is many of these institutions will not only want physical gold, but will eventually make their way into the equities as well.
Pierre Lassonde is one of the living legends in the mining world. Pierre is current Chairman of Franco-Nevada and Co-Founded Franco-Nevada Mining Corporation with Seymour Schulich in 1982 and over a 20 year period, provided shareholders with a staggering 36% annualized rate of return.
He was able to build up and successfully merge Franco Nevada into Newmont Mining in what was essentially a depression in the mining sector. It was the worst of times, but somehow in the midst of those horrific industry conditions Pierre and everyone associated with him thrived and quite frankly made fortunes. Pierre then became President of Newmont Mining Corporation from 2002 to 2006. Pierre is also past Chairman of the World Gold Council.
......and from zerohedge
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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