Howard Buffett Said "Human Freedom Rests On Gold Redeemable Money", Called For Return To Gold Standard

Tyler Durden's picture

Sometimes the apple does fall very, very far from the tree. A must read essay by Howard Buffett, father of the "legendary" investor who initially was so very much against derivatives then promptly changed his tune, discusses fiat money and gold, and concludes that "human freedom rests on gold redeemable money." In this stunningly simple, straightforward, and flawless analysis, Buffett's father stresses the relation between money and freedom and contends that without a redeemable currency, an individual's freedom and one's access to property is dependent on goodwill of politicians. Buffett also says that paper money systems generally collapse and result in economic chaos. He goes on to observe that a gold standard would restrict government spending and give people greater power over the public purse. Lastly, back in 1948, Howard Buffett, said this the "present" is the right time to restore the gold standard. Alas, 60 years later, his advice has still been largely ignored, and as a result we have a global economy that stands on the precipice of global default with runaway budget deficits across the entire developed world. Key quotes: "Is there a connection between Human Freedom and A Gold Redeemable Money? At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere. But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty. Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom." His conclusion is eerily prophetic with what is happening with US society currently: "I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money."

And of course, the Federal Reserve is at the forefront of those who will do everything in their power to prevent a return of the gold standard:

Most opponents of free coinage of gold admit that that restoration is essential, but claim the time is not propitious. Some argue that there would be a scramble for gold and our enormous gold reserves would soon be exhausted.

Actually this argument simply points up the case. If there is so little confidence in our currency that restoration of gold coin would cause our gold stocks to disappear, then we must act promptly.

The danger was recently highlighted by Mr. Allan Sproul, President of the Federal Reserve Bank of New York, who said:

"Without our support (the Federal Reserve System), under present conditions, almost any sale of government bonds, undertaken for whatever purpose, laudable or otherwise, would be likely to find an almost bottomless market on the first day support was withdrawn."

Our finances will never be brought into order until Congress is compelled to do so. Making our money redeemable in gold will create this compulsion.

Full essay below, which we are confident was never read by Howard "oracular" son.



h/t William

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Jesse's picture

If the US were to monetize its existing gold reserves (at least if they do exist, unemcumbered), gold would have to increase to roughly $36,000 per ounce.

Hm.  Uh, ok. Let's do it. lol.

koaj's picture

or federal spending would have to crater about 80%



jmf's picture

Moin from Germany,

add this interview from a guy called Mark Fisher, of MBF Asset Management to the mix....

Never heard of him, but i already love him.....

Wyndtunnel's picture

I watched this live this morning.. He's awesome.  He basically sits there and tells the usual gang of idiots that it's over for the market, things won't improve until there is a reset, nothing the authorities can do will make a difference.  After every lenghty comment you can hear a pin drop as the Quick and co. spin their wheels in disbelief.  I was howling the whole time!

jmf's picture

Moin again,

i think we can add him to the "ANTI SPIN DREAM TEAM" almong with Rosenberg, Hussman, Sprott and probably only 4 or 5 other guys.....

Thisson's picture

I agree with his thesis but he's not very articulate...

A Nanny Moose's picture

What do you want? Doesn't require great oratory skills to convey the math of 0-$1trillion = -$1 Trillion.

Obamabot has oratory skillz, but can't seem to convey a damn thing. He is just there to stroke us, as a distraction from the cornholing we are receiving.

Common_Cents22's picture

He won't be back on CNBS very often, and if so, there will be 5 bulls to offset him.

Prechter was on fast money not long ago and they ridiculed him.  You could tell all the CNBS morons were on the defensive.  "Noooo, I don't wanna hear about reality!"

Gordon_Gekko's picture

Well, Prechter is in a separate class of idiots by himself.

Johnny Bravo's picture

You mean like the "gold to 2000 by June" Zerohedgers?

By the way: it's almost June, and gold is still the same price as when that poll was put on this site.

Burnbright's picture

Or like those idiots that kept saying gold was going back down to 600-800 range... oh wait.

Moneygrove's picture

Erin burnett told him !!!!!!!!!!!!! lol

Hulk's picture

He must have threatened to kill them after the show if they interrupted him.

never seen those 3 idiots that quiet...

Cognitive Dissonance's picture

The best part was right at 7 AM when he was first introduced. Joe asks him a stupid question and Mark Fisher starts to roll his eyes a bit, begins to answer and then says something along the lines of "You know, they're betting I won't last the entire 2 hours of the show."


I assume "they" are the people on the exchange that know that this guy is obviously a straight shooter and wouldn't be able to tolerate the idiots for 2 hours. About 6 times that I saw while watching the words "Goldman Sacks" were forming on his lips while talking about banks, brokers, Flash Crash etc but he always caught himself and said "the banks" or "the spec players" or whatever.

I opened my office late this morning so I could drink Mark Fisher's milkshake. :>)

Rick64's picture

LOL. CD you know that has a sexual connotation.

greased up deaf guy's picture

actually, it's a "there will be blood" connotation.  daniel day lewis.  good stuff.

Mr Lennon Hendrix's picture

And tungsten would have to be like, a million dollars.

Johnny Bravo's picture

This proposal shows the age of the elder Buffett.

Labor is an infinite resource.  You can't back potentially infinite production with a finite resource if there is to be growth in an economy.

Also, money is already redeemable in gold.  Goldbugs do it daily when they pay inflated bubble prices for an ounce of gold.  I can take my dollars and redeem them for gold at any time I wish as it is.  I wouldn't pay the inflated prices of the gold bubble, however...

tmosley's picture

Wow, you think there is an infinite source of labor?  I guess you must be posting this from your time machine that runs on a perpetual motion device powered by antigravity.

Labor is NOT infinite, you bleeding moron.  If labor were infinite, everything would be FREE.  

Dollars are NOT redeemable for gold.  They can be used to purchase gold on the open market FOR NOW.  Zimbabwe dollars can't buy gold (where once you could), no matter how many of them you have.  If Zimbabwe dollars received a gold backing, no matter how miniscule, then you could trade them for gold, or anything else, so long as a fixed amount of gold was held by their banks and they were freely exchangeable.

I mean Christ, MB, you've said some dumb shit in your time here, but this takes the cake.  You need to go to the emergency room and make sure you don't have an aneurism or a brain tumor pressing against the logic center of your brain.  I mean, you comments are THAT STUPID.

RockyRacoon's picture

You are right, he is wrong.  On the other hand you have responded to the dreaded troll.

He gotcha.

Johnny Bravo's picture

That fuckin tard couldn't even spell his name if he had to, let alone make a valid economic argument.

I can see why you agree with him.

Johnny Bravo's picture

How is labor not infinite?  I mean seriously, what the hell is wrong with you people?

When you have children, labor increases by the amount.  Sure it's not INFINITE per se, but you can't quantify it with a FINITE RESOURCE.  The growth is larger than the amount that can be backed with a finite resource.

Who says you can't buy gold with Zimbabwe dollars?  Sure you can!  It just takes more Zimbabwe dollars to buy the gold.  It might take a billion or a trillion dollars, but I guarantee somebody will take them from gold.

Since you call me dumb and whatever garbage you spout...I made 60% in the markets last week with VXX and FAZ.  How much did you make?

Oh wait, gold was DOWN.  It was flat since December.  Now it's going lower.
Sure sounds smart to me.

DaveyJones's picture

labor is only infinite when stupidity shares the same quality

tmosley's picture

Labor increases when you have children, sure, but how many generations does it take to reach an infinite number of people?  By that definition, EVERYTHING is available in infinite amounts.  You can ship some of those infinite kids to Mars and have them mine for gold.  When Mars is done, move on to the moons of Jupiter, then Saturn, then Alpha Centauri.

The fact is that there is a limited amount of labor, which can be easily represented by a limited amount of gold.  

Ha!  You made money this week with FAZ, huh?  How many times did you get whacked trying to play that before?  How you doing for the decade, champ?  Me?  I'm up 700%, or thereabouts, on my first purchases.  Cost averaged, I'm up maybe 100%.

What planet are you from where gold is going lower when $30 off its all time highs?  Seriously, I would suggest you get your head checked out.  You might electrocute yourself by drooling on your keyboard as you stroke out.

Bheithir's picture

The ONLY things infinite, are the universe and stupidity.

Zerozen's picture

OK, to clear these two points up once and for all, because clearly you don't get it:

1) "Gold backed" means that the currency is exchangeable for gold in a FIXED RATE. For example, right before Nixon took the US off the gold standard, it was $35/ounce. 1 ounce of gold = $35. Another example is the Pound Sterling. The very name for the British currency comes from the fact at one time one unit of British currency was worth one pound of sterling silver. Get it yet? It was stability. What you're talking about is just buying gold with paper whose real value fluctuates wildly over extended periods of time.

2) Labor is not infinite. On an infinite timeline, labor is infinite. Since this is not the case and we live in a world where the laws of physics demand that we can only experience life one moment at a time, labor at any given point in time is not "infinite". It's definitely finite. What the hell are you smoking, and where can I get some?

Operafaust's picture

"Labor is an infinite resource"

No it is not. Infinity implies complete lack of replacement cost and an exponential ability to increase supply relative to other factors of production. Labor is subject to depletion, even in the face of demographic trends that defy social engineering.

"Also, money is already redeemable in gold".

No it is not. Redeemable implies that the paper note is in fact a de facto debt instrument; the holder of the note reserves the right to receive the equivalent amount in gold. He doesn not exchange the paper currency for gold, but merely calls in his 'loan' of the metal. When a person purchases gold under the fiat system he is not exercising a right, but making a purchase wherein a genuine transfer of ownership is effected. As for your assertion that gold is an inflated bubble, kindly compare a logarhythmic scale chart comparing increases in the price of gold since 1980 as opposed to M3 money supply growth and credit growth in the same period. Also, compare the current spot price of gold to its inflation adjusted 1980 high. That should paint a clear picture as to what is and is not a bubble.


RockyRacoon's picture

The troll will not respond to reason.  You have laid out a valid case for labor.

See comment above.  You've been had.  But you have provided a valuable service nonetheless.

Johnny Bravo's picture

And what would you call somebody that contributes absolutely nothing in intellectual argument, who merely calls others trolls and parrots (incorrect) logic from other morons that haven't made any money in the recent rally?

I guess it wouldn't be a "troll".  It'd be a "lemming" more or less.

nuinut's picture

In the bigger picture, Bravo, you are the lemming.

Open the curtains; it's a big world out there.

Johnny Bravo's picture

"exponential ability to increase supply relative to other factors of production"

So why is population growth modeled with an exponential function with exponent E?  population = labor.  Population growth is infinite (in theory, not in practice) and cannot be modeled by a finite resource like gold.

Because it is infinite, in theory.  Sure there are caps on population growth EVENTUALLY.  Still, we can have a lot more exponential growth before the labor pool depletes. 

As far as what's in a bubble, the same argument can be made about 1980 being in a bubble too.  Just because it's lower than 1980 doesn't mean that 1980 wasn't in a bubble either.
Retail investors pile in before the trend change and create the bubble.  This is what is happening, as is evident on zerohedge.

Why are all the major banks short if it is NOT in a bubble?  Because they always lose money trading, right?
Oh wait, my bad.  They were right 61/61 days last quarter.

I guess that people that don't know a MF thing about trading give better financial advice than Goldman Sachs practices...

You can take any amount of money you want and buy any amount of gold you can afford.  Seems redeemable to me...

faustian bargain's picture

'Buying' is not 'redeeming', in this context. If it were, the supply of paper dollars would be pegged to a certain amount of gold.

Not For Reuse's picture

There's no point in arguing with someone who 1) thinks human population growth is infinite ; 2) doesn't understand the time value difference between "buy" and "redeem" ; 3) posts on a blog about the "amazing profits" he made on hypothetical trades ex post facto.

faustian bargain's picture

Meh, I know there's no point. I do it for my own entertainment. Kinda like a cat playing with a mouse.

Burnbright's picture

It really isn't even a problem of human population not being infinite. Assuming infinite labor is assuming infinite time, not just population size. Regardless of the size of a population, infinite or not, the amount of time being used up by each individual is finite and thus costs that individual something.

People would have to live for an eternity for their labor to be infinite.

nuinut's picture

good luck eating your theory then Jonny

Clampit's picture

By your logic gold is also infinite, as it simply takes more labor to mine more gold. Unless you think we're close to seeing the peak-resource for our little planet...

tmosley's picture

At that point gold goes...down?  Apparently that is what happens, in the cancer-ridden mind of the Great Masterbator.

merehuman's picture

masturbation ridden mind of a cancer on plain truth.

Thoreau's picture

You're right - labor is infinite; just no longer in the U.S.; which is kinda Mr. Buffet's point. The man on the street forfeited his rights by allowing Big Brother - your Dad? - to inflate his wealth to nothing. Get it, Magoo? Or is that Son of Uncle Sham?

dumpster's picture

so you have your text book  keynesian theory at your finger tips

reading the stuff whole cloth , as this is an intellectual argument ...

the world is raging , currencys are being bombed world wide


and johhny brovo settting in some cubical waitng for his next class,, sans job sans savings sans even a smallpot to pizz in,, second that thought ,you do have that


not reading the messages in the and central topic on the nature of the articles .. but making things up ,, that really have no intrinsic value .. other than a fog horn of the existing economic mess ,, world wide ,,caused by ,, you quessed it lack of controls on the absurd notions of politicians '

gold has noticed it ,, from 250 where it was pushed by the selling forward of productiion, the very able and determined group of thugs that had Johhny in the palm of their fingers ,,a believer .. and a coming rat fink for their plans. now pushing into 1200 on its way to 1500 .. now what will your story be then come christmas ,,

and how many hats will at the time been destroyed by your mouth and tooth decay , 

Rick64's picture

I guess that people that don't know a MF thing about trading give better financial advice than Goldman Sachs practices...

You should follow their advice on currency trading, they seem to be doing really well.

A Nanny Moose's picture

Surely the PoG would inflate due to screaming demand. Ultimately, I would think an ounce of gold would be worth the same against a basket of goods.

DosZap's picture

Sir Jesse,

I know you were being humorous on the let's do it.......

But,at what point do you think they allow for any redemptions, at any price over $2500.00oz?.

I don't see it......they likely would offer us the Offical rate, of $42.00, and relieve us of our burdens.

greased up deaf guy's picture

looks like the "barbarous relic" has a use after all.