University of Texas Investment Fund defects from paper currency: buys 1B in gold

Something happened Friday. It seems that it is significant. I am not familiar enough with global economics to be able to place it in a context for you, but it is something, my gut is telling me. The guys at Zerohedge noticed that during the week, gold prices were going funky. Silver was going stratospheric. Why? Economics is a causal relationship- when one thing happens it causes ripples elsewhere. No ever stands in a vacuum. So what was causing the commodity price to skyrocket in this way? Friday came the answer, and the Zerohedge guys call it a tipping point:

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

I noticed their phraseology in saying that the event is a signal of a defection from our monetary exchange. Also, in the third sentence, they mention the black swan. The Black Swan theory was developed by Nassim "Nicholas Taleb to explain the disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology."

It's evident that we are entering into the realms of never-before-traveled territory in economics and finance. Not that economies haven't crashed before. Not that there hasn't been hyperinflation before. But never in such global proportions and never before when we have been so intertwined.

Forbes explains the University of Texas activity as a response to the falling dollar:

"It should come as no shock to financial markets that university endowments have followed in the wake of central banks and hedge funds to become the newest major investors in  precious metals like gold. Just as  central banks in China, India, Russia and many other nations view gold as a monetary reserve protection against the  falling dollar,  major academic institutions are  looking for new asset classes like precious metals and commodities  to produce returns that can be put to work as a source of funds  for a large portion of college operating expenses."

So Friday, UT invested 5% of its entire portfolio in gold. Did you know that last July, they invested 3% of their entire portfolio in gold? "The Houston Chronicle reports that the university bought the gold out of fears of "unstable international financial markets and the possibility of high inflation." It is relatively uncommon for a university to invest in gold, the value of which only increases through inflation." So by now, UT has at least 8% and likely 10% or more of its investments in gold. How many others are doing the same? Many, I suspect.

Thursday, Kyle Bass, a Dallas Hedge Fund Manager and representative of the UT Board, made the recommendation to buy more gold. In his reasoning, he's quoted as saying, "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 don't know how large University financial institutions work normally, but in my experience, they work slowly. In this case, they bought the gold the next day. The next day.

Maybe it's facts like these that cause the haste:

It's clear that we're tanking. America's economy is on a downward slide and as a snowball rolls downhill it goes faster and faster. Do the people experiencing a crash ever know it at the time? The folks in 1929 didn't. They thought things would get better. When they didn't for two years, they finally woke up. By then the Depression was at rock bottom.

Refusal to believe what is happening in front of your eyes is called normalcy bias. There obviously are some people who see the coming crash and are doing something about it, like the folks at Univ. TX. Others see the coming spiritual crash and are taking steps to prepare, by converting from craven sinner to forgiven saint thanks to the blood of Jesus and their confession to the Lord. But most won't do anything different right up until the end. Normalcy bias is defined as:

"a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of the government to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation."

Does that sound like any unsaved person you have tried to talk with lately? Does that sound like any nominal Christian who refuses to heed the warnings to persevere? Jesus described the normalcy bias in the bible:

"And as it was in the days of Noah, so it will be also in the days of the Son of Man: They ate, they drank, they married wives, they were given in marriage, until the day that Noah entered the ark, and the flood came and destroyed them all. Likewise as it was also in the days of Lot: They ate, they drank, they bought, they sold, they planted, they built; but on the day that Lot went out of Sodom it rained fire and brimstone from heaven and destroyed them all." (Luke 17:26-29)

It seems hard to believe that as a third of the rivers and waters turn to blood, that as wars are happening all around, as millions have disappeared in the rapture, & etc., that people will continue to carry on expecting things to return to normal at some point. It won't.

The normalcy bias is described again, in 2 Peter 3:4 - "They will say, "Where is this 'coming' he promised? Ever since our fathers died, everything goes on as it has since the beginning of creation."" They say that since things have always remained the same that the rapture won't occur. Oh, but it will.

This week I listened to four sermons. One from my local pastor, another from John Hagee, from John MacArthur, and from Steve Hadley. They all preached the rapture. They all explained the prophesies. They all said the same things and interpreted the scriptures the same way. I glory in the Holy Spirit when things like this happens! I believe the Spirit is prompting the bible-teaching pastors to speak these things to encourage the body and to prepare us for His calling us 'up there.'

Things are not normal and each day that passes they get less normal, but the praise is, as each day passes, we are one more day closer to being with the Lord! Therefore, brethren comfort one another with these words. (1 Thessalonians 4:18)

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