Recently the University of Texas Investment Management Co. converted its gold futures holdings into physical bullion worth about $1 billion. The fund has 20.7 tons of gold stored in a New York vault. Bruce Zimmerman, chief investment officer of the $26 billion fund said, " It's a very conservative hedge against some low probability scenarios, such as the debasement of a major currency." He's not alone. In 2010, total physical investment in gold bullion soared 66% to 880 metric tons. That's also almost mostly stored in New York vaults.
Assuming that no one has tunneled into the the gold vault and it is still there next week and the worse happens. What's Bruce to do? Bruce is in Texas and the gold is in New York. Can Bruce handle 20.7 metric tons of gold? Does he have a truck? Who will help him pack the gold? What will the help charge? Where will they take the gold? Who will be in business to accept gold? What will they charge? Will vendors of food and services respect Bruce? Does Bruce own a gun?
Financial assets are a lot different than physical assets. One can have billions of financial assets in a drawer whereas thousands in gold or silver needs a lot more care in storage. Mega wealth in dominations of gold and silver needs massive security precautions. And in the end relies on the honor of all involved. That need for "honor" is a tall order. In the future guns are a better investment for personal security than attracting threats to ones personal security by lugging gold or silver around.
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