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Why Warren Buffett Hates Gold
The “Oracle of Omaha” expounded at length today on why he despises the barbarous relic. The sage doesn’t really care if the yellow metal hit an all-time high today of $1,440. He sees it primarily as a bet on fear. If investors are more afraid in a year than they are today, then you make money. If they aren’t, then you lose money.
If you took all the gold in the world, it would form a cube 67 feet on a side, worth $7 trillion. For that same amount of money, you could own other assets with far greater productive power, including:
*All the farmland in the US, about 1 billion acres, which is worth $2.5 trillion.
*Seven Exxon Mobil’s (XOM), the largest capitalized company in the US.
*You would still have $1 trillion in walking around money left over.
Instead of producing any income or dividends, gold just sits there and shines, letting you feel like you are King Midas.
I don’t know. With the stock market peaking around here, and oil trading at $117/barrel in Europe, a bet on fear looks pretty good to me right now. I’m still sticking with my long term forecast of the old inflation adjusted high of $2,300. Even Buffet admits to keeping $30 billion in cash on hand for a rainy day.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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If you had all the gold in the world, you could start your own currency backed by gold. All fiat currencies would fail and you could buy whatever you wanted.
Your statement is not complicated enough for modern economists and there is no quadratic equation associated with it. Therefore, is not valid.
Elegance in simplicity is dead. Common sense does not count anymore.
BTW: How many phd's do you have? You need at least 3 to be a statesman in economics and pehaps a Nobel prize to go with it. That will get you re-elected and respected.
Drop out of college while you can and become plumbers, electricians, carpenters, farmers and save the day when time comes.
The government can"confiscate" farmland,equities, and pocket money. Those assets are also worth zero if forced to flee to another country to avoid government theft of such " assets ". Like many dictators have shown, gold is portable and accepted everywhere. Try taking your XOM or farmland to mexico and retiring on it . Buffet can trust the gubmint not to steal his assets..... Can you?
Most of us aren't filthy rich people who learned how to game the system or use insider information to stay ahead of inflation.
Owning a ittle PM is one of the few ways we can decouple whatever wealth we have from the USD. These people want to control 100% of what we have and they resent not having complete control.
Tool...
Buffett is an insufferable sanctimonious wanker.
mister buffet and his banks and insurance companies are a big benefeciary of the privately owned federal reserve bank.
I have a form if metal ready for all the families you just mentioned...and it isn't gold...
Buffet is probably just "testing" the waters. Big speculators check the resiliency of the markets they are in or planning to be in by either voicing the opposite or actually sending in orders in the opposite direction just to see how the market handles it (non-rigged one).
Besides, Buffet has "issues". Anyone who still continues to try to make "money" when they already have billions should have retired long ago and be on vacation forever. It's a form of mental illness IMHO. It's never enough. I personally knew someone (he's now dead) who was worth several hundred million (at the time he was approaching 80 I'd guess) and all he could think of was how to make more. He was not a happy man...I could see it. He had the bucks but didn't know how to enjoy it. So now he's a dead man in a hole and what did it really do for him? Not so smart and neither is Buffet. Besides, is Buffet not a mouth piece and puppet for his owners, such as Rockefeller, Rothschild, Morgan, Warburg and the rest of the families who can't get enough?
MHFT is a phony. That global warming/Ehrlich article last week was dripping with bullshit. This article is old info, it falls under the category of 'attempted reputation enhancement within the infiltrated community of insurgents and radicalized conspiracy theorists'
MHFT told people Physical Silver was useless and had no value at $26,disregard anything this shill writes.
Buffet has earned all his money on insider information, closed deals, scams, and collusion with government and Wall Street. You don't pick stocks 1000 times in a row without losses any more than you roll sevens 1000 times in a row in Vegas.The gang of banksters he runs with run the gamut of illegal and immoral business dealings.
Of course Buffet hates gold. Gold is the poor mans reaction to corrupt government.
Falak Pema We aren't saying no to ze Capital Markets by buying gold we are saying the capital market is completely fucking broken and until fixed we are not coming back. Please also remember (if you aren't an American your are excused from knowing this) but our Capital Markets "were" built off of the gold standard then ruined when we strayed from it. Hope you understand
That's precisely my point. So I've got to say I understand. But I also understand the broader picture that WB adheres to. He doesn't want gold to become an obsession to which we return because we don't know how to do due diligence with our fiat monies and with our economies : balancing budgets etc. It's no big deal to have central bankers who know how to use interest rate AND money supply to fight inflation and ensure growth. Admittedly, in coherence with fiscal policy. Which has been missing in USA since LBJ days. So balance the budget, get your current account in line, pay back your debts, and use interest rates and MS with due diligence and things should work out. But to do that you gotta change your "Reaganomics" mind set : think anything goes in the market, that as top dog USA doesn't have to balance budgets or do due diligence. We're Imperial. Nuts. Your markets now hostage to past mind numbing hubris. Something has to give, as Billy Wilder said. It will.
What's Buffets point? Gold has risen 500% in 10 years, "fear" or not it's a great investment asset so turning your nose up at the maths looks like his personality (ego!) is getting bigger than his job as an investment manager to seek returns!
...sounds like bollocks from Buffet, is he passed it???
Will trains return 500% over 10 years? If the US Govt goes bankrupt and has to remove subsidies for this 100 year old dead-as-a-Dodo bankrupt transport industry my guess is he picked the wrong "barbarous old relic" to invest in
He bought the rail road to later trade the carbon credits!
Goodbye Chicago Carbon (Fraud) Exchange, Goodbye Carbon (Fraud) Credits, Goodbye (bankrupt) Trains .........at last!!!
He is right WB. Like Plato was, when he wrote the Republic and said the best type of ruler was the "philosopher-king". A breed that's never existed in real life. When push came to shove either the philosopher imploded or the king lost his crown, and his royal nuts. In an ideal world, gold is an anachronism. America's greatest legacy to modern enterprise is the capital markets. If you don't believe in currency other than PMs you don't believe in capital and capital markets, all inventions of the mind, virtuality that become real thanks to faith and entrepreneurial genius. Gold is like going back to pre-capital days. Maybe the Oracle is saying : fellas, the capitalistic game isn't over. If you buy gold you say "No more capital markets". That's heresy to the Oracle...But today, it may be a life jacket in the short term... until capital markets become a level playing field again. Will they ever?
He's just talking his book. Gold has been the best performing asset in the past 10 years. It returned 29% in 2010. How many fund managers can beat that? If Gold has a few more of those 20-30% appreciation years than that giant whoosing sound will be the sound of the air deflating from the numerous hedge funds, mutual funds and other managed money and rushing into Precious metals. Most money managers will never acknowledge the importance of precious metals because it diminishes their so-called importance. As long as they have the Fed put (in the form of unlimited printing of fiat money), the fund managers can keep selling snake oil to the gullible folks. They will spend countless hours on CNBS, etc. extrapolating the finer points of the yield curve, the long bond, interest rates, T-Bills, T-Bonds, etc. But all of these variables are predicated on the USD (about which we have no comments). Like Gonzalo Lira said in one of his articles: 'They are paving a concrete road over a giant sink-hole').
Gold isn't supposed to be productive, Warren, it's supposed to be money. Paper could also be money in a perfect world but now, as has always been the case, the printers of money can't stop themselves, so we go back to gold. Gold isn't an investment, it's cash or a currency trade if you will.
More like Warren Buffet is a relic from the past.
Those are some very old comments from Buffet. Find some new material.
You know, this gets rather old and tedious at times, but one of the best and easiest ways to understand the PM / intrinsic coinage phenomenon is the human circulatory system.
5 liters of blood in your body. 7200 liters needed to pass through in a 24 hour day to remain healthy.
So, according to Mr. Bernanke, because the body doesn't have 7200 liters it makes no sense to use it as a monetary device in circulation.
The fact is, it works because it has limited supply. When it gets hoarded and taken out of circulation like their current efforts are causing, the body dies.
It's designed for circulation. It only works when it works.
His father believed in a gold standard.... maybe he hated his father?
Seriously, I'm convinced phony pricks like Buffett and Bill Gates have so much invested in fiat based assets they can't unwind it fast enough. They're committed to it because they'll take a bath too.
Oedipus complex
+1
Yep, that's the problem when you become so big you either move the market or even are the market.
Farmland is taxed, and it takes energy, chemicals, and water to produce anything on it. It's also a depleting asset, as topsoil is depleted to grow ethanol corn. Like turning gold into lead.
Gold can't be turned into lead.
What's XOM going to be worth when they can't find any new oil fields, or our military won't strong-arm foreign lands into letting them drill?
Exactly. It's an absurd comparison. Of course, I'd love to own all of the farmland and Exxon, etc.
But, farmland isn't portable, and shares of Exxon are not physical possessions.
"If you took all the gold in the world, it would form a cube 67 feet on a side, worth $7 trillion. For that same amount of money, you could own other assets with far greater productive power, including:....."
And what good would it be to you and everybody? It must be about one of the most useless metals available ..... but perfect for fools, indeed.
Useless..., my ass.
It's the perfect tool for trying to keep men honest. Sometimes it works better than other times, but eventually it works.
Makes you wonder about the folks who hate it so...
Buffet has the right vision, just the wrong shape. Gold (Au) will eventually accumulate (katamari) into one large lump here on earth with the help of carbon (C) and oxygen (O), (people and oil). Buffet needs only to re imagine the shape of the eventual Au unity. My hope is to fashion an enormous Au torpedo and shoot it towards the center of the earth, thus enhancing the crystal iron (Fe) core of the planet.
You can't expect him to tell the truth in public. I would bet he has a huge store room of gold he has stored away. He is simply keeping the sheeple asleep in how valuable gold is. If people are a whole began investing in it, it would go way up and he would not be able to keep buying it and hiding it away. I don't believe any of them at the top who say gold is a bad investment. They know it is not. They use the normal psyops terms so people stay away from it, otherwise they will look fearful.
Anytime any at the top say one thing, I do the opposite.
Let's say Uncle Warren is indeed sitting quietly on a basement full of gold. What is he waiting for? He's 80 years old. Maybe the gold is willed to charity along with the rest of his plunder? "He who dies with the most money wins"?
Back in my school days, I knew kids like Buffet: The ones who sold stuff door-to-door, who always thought about making money when all I thought about was my girlfriend & going surfing. I considered them losers. I still do.
I think Warren Buffett is a loser. He's spent his entire life doing deals and amassing money. To what end? He says himself that he doesn't want material things much, that he plans to give it all away. So the main goal of his life is philanthropy? Hardly. The giving is an afterthought, an acknowledgement that the money is ultimately useless to him, and that his life was all about winning. Winning the money game.
In the meantime, his wife bailed on him in 1977, and he carried on with his mistress and his estranged wife in a weird relationship until his wife died.
He used to be a great investor. Now he's just another crooked insider who gets deals because he controls so much money. Sad.
I never made much money. But I did just come back from spending the winter in Mexico, on the Baja coast, with my girlfriend from 37 years ago. It was great. Didn't see Warren there, though.
+1
Most of us would be happy to have a tiny fraction of WBs assets and retire to some remote tropical island where they make decent cocktails. Life is too short to spend it all accumulating money.
But not Warren. If not money, what? Fame? Power? I don't see where he has enough of either to make living in Omaha worthwhile.
For some reason that post really spoke to me.
"A small house can hold as much happiness as a big one."
I hope to go to the coast with my current girlfriend of 14 years.
Thanks
Fourteen is a tad young, don't you think? ;)
Holding gold over the past 10 years easily outperformed Buffett. No wonder he is pissed.
Sad that Buffett became such a bail out baby asstard later in life...his father, Howard, who was a US Congressman was a big fan of gold backing the dollar....he would be ashamed....Gold is not an "investment" Warren...Gold is MONEY and now-a-days $7Trillion ain't that much....
His son Warren is an embarrassment on the topic of gold. So is this article.
you suck buffet go and fuck your friend windamn bill
30 billion for a rainy day?
he should move to delaware...its supposed to drop 2-3.5 inches in next 24 hours.....let it rain
thats almost four days of obamas spending in febuary
i think he is hoarding cash because he knows the nature of the fed.
looks like he expects a dollar rebound and cash will be king at some point (again).
as in a suspension of QE3. Then he, along with the FED and all the other wall street hacks will have a place to put their cash - post DOW collapse.
It's more convenient to hold debased FRN & claim your a billionaire.
When will these dinosaurs learn that Gold is not an investment vehicle for profit in fiat currency!
As usual, Buffy`s description of Gold vs Money is bass ackwards
gold is still better than most stocks over time. the only major exceptions are coca-cola and credit suisse.
http://covert2.wordpress.com
tarpuranus is totally right. Buffy and his moronic view of gold just boggles my mind. he should stick to what he knows. i mean how stupid is his analysis that gold is "dug up out of the ground and then someone buys it and puts it back in the ground"? he is so cheap that he's probably never bought anything gold for his wife or girlfriends. um, Buffy, Gold has always been used as a currency since it was discovered! And it always will. just b/c countries choose not to use the gold standard doesn't mean it is only a "fear trade!" for such a smart stock investor, he sure makes an ass out of himself sometimes. he should just shut up about gold, pay all of his money in taxes to the government and stop with his know it all attitude.
Buffett hates god, gold and guts. Probably hates (Bill) Gross for bailing on Tresuries also
But he loves government! There's a g for ya.
This is old news and has already been refuted - other than an advertisement, why is MHFT bringing this up again?
Buffet knows the truth, as many others do but will never admit to it.
You dont buy gold to make money, you buy gold because you have money!
I will never sell my gold, but one day I may spend it!