Radio and TV host Glenn Beck likes to talk about the potential collapse of the American economy. He also likes to talk about buying gold as a hedge against the unknown.
Thanks in part to UT Austin buying 1 billion dollars worth of physical gold bars.
In one of the most remarkable turn of events in Gold history, the University of Texas endowment fund managers announced they have taken delivery of $1 Billion Dollars worth of physical Gold!
UT took delivery of 6,643 actual bars of Gold Bullion, or 664,300 ouncesâ€“ a quite unusual transaction for any university, one that may set a trend for soaring physical Gold demand in 2011. Note that the investment was not in a Gold ETF or individual Gold mining shares or in Gold futuresâ€“ but in real, physical Gold Bars.
And expect to pay more for electronics.
The most important industrial use of gold is in the manufacture of electronics. Solid state electronic devices use very low voltages and currents which are easily interrupted by corrosion or tarnish at the contact points. Gold is the highly efficient conductor that can carry these tiny currents and remain free of corrosion…Â Gold is used in many places in the standard desktop or laptop computer. The rapid and accurate transmission of digital information through the computer and from one component to another requires an efficient and reliable conductor. Gold meets these requirements better than any other metal.
And all of it timed at the same time S&P received an open letter to downgrade US debt.
He acknowledges the turmoil it would create, punishing Treasury bonds and causing interest rates to spike. In Weiss’s view, however, leaving the AAA-rating untouched could ultimately prove far worse. It gives Congress a free pass to add to the public debt and encourages investors to buy Treasury notes and bonds, whose low yields, he believes, donâ€™t compensate for the dangers.
“Worst of all,” Weiss writes, “by continuing to reaffirm America’s triple-A rating, you help create a false sense of security overall–the recipe for a possible meltdown in the market for U.S. sovereign debts.”
which S&P then did
The closing bell on the New York Stock Exchange sounded at the end of a jittery day of trading. Stocks had plunged at the outset, when one of the nation’s largest bond-rating agencies, Standard & Poor’s, downgraded its long-term outlook on U.S. Treasury debt from stable to negative.
S&P said there’s a — quote — “significant risk that Democrats and Republicans cannot agree on spending and deficits until after the 2012 election.” The agency said, “We see the path to agreement as challenging, because the gap between the parties remains wide.”
OK, for those following at home. Your elected officials are squabbling and trying to get reelected instead of running the country. And that raises interest rates. Which makes it even LESS LIKELY that people will be able to sell or buy homes, start businesses, etc, etc. Or that a lot of my unemployed friends will get jobs. Which just sucks.
Not sure what happens next. But I am pretty sure this isn’t good for our business or for job creation. Keep on keepin on I guess…