Jim’s Mailbox

Posted at 12:54 PM (CST) by & filed under Jim's Mailbox.

Jim Sinclair’s Commentary

The following chart is courtesy of CIGA Stefaan.

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Dear Jim,

Your comments today on institutions investing in gold were right on. Having worked for one of the world’s largest actuarial consulting firms and having spent years in the pension funding industry, I know that many pension funds, especially governmental funds, are severely underfunded and would need annual gains in excess of 20% to maintain their validity.

The recent embarrassing run for President by our governor of Texas might leave the impression that Texans are not too smart, however, the Texas Teachers Retirement Fund has invested 5% of total assets in physical gold. They made another large commitment last year when it was $1486/oz. Mr. McGuire, the fund manager, originally started investing the fund’s assets in 2007 when gold was $650. That is a significant profit to date. Other fund managers will follow as pointed out in the article you can find by clicking here…

Another interesting news excerpt from Bloomberg in 2011 is below:

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.

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.

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Sincerely,
CIGA DM

Hi Jim,

Though I’m sure you’ve seen this already, I wanted to share just in case. You were the first and only to mention Tanzania (which of course is part of East Africa) of all people I listen to or read over the years.

All the best,
CIGA Omid

My dear friend Omid,

If you were there with me in the 80s and I told you a leading international manufacturing nation was taking form along with China you might have laughed at me.

The ascendancy of Africa, lead by Tanzania and its present president is taking place.

Tanzania is loaded with natural gas at their Songo Songo project.

In the 1990s I wrote a book about India, China and Tanzania called Boom (click here to view it on Amazon.com). What you are seeing now is all contained there.

Regards,
Jim

East Africa Hosts Biggest Natural Gas Finds

Jan. 17 (Bloomberg) — One of the world’s poorest regions is also home to the biggest natural-gas discoveries in a decade, luring investors from steel billionaire Lakshmi Mittal to Royal Dutch Shell Plc. Lara Setrakian reports from Dubai on Bloomberg Television’s "Countdown." (Source: Bloomberg)

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Good morning Jim,

Once again, fantastic interview with Eric and amazing foresight regarding the mainstream entities that will begin to enter the gold market. The beauty of all this is the fact that the world is now waking up to the fact that gold is not a commodity, but currency with many functions such as performing insurance, liquidity, store of value, etc all because of gold’s absence of counter party risk. Gold’s risk has been paid forward. That is how it became a coin. When one holds physical gold they are paid in full at that moment. All the blood, sweat, tears, intellect, etc that went into not only discovering a mineral deposit but the shear amount of man’s time, energy, and effort to extract, refine, mint etc that yellow element is trapped inside that physical asset. In a world awash in liabilities and the "daisy chains" of counterparty risks, very few assets stand outside that realm. Gold, the wealth and reserve asset of the ages, is coming back and will leave many a wondering "How did we miss this?"

Have a wonderful day,
CIGA PM

Dear CIGA PM,

What I tell you is not a personal conclusion but personal information derived from fact, not speculation.

Mainstream entities are entering the gold market quietly. After June the rush will start because these guys are follow the leader types.

Regards,
Jim