Dear Willem Buiter: If Gold Is A 6000-Year Bubble, Then What Is This?

Tyler Durden's picture

Citi claims gold is a 6000-year-old bubble, perhaps Mr. Buiter has not seen this chart?



...and funny how Mr. Buiter never wrote any extensive essays about the bubbleness of Citi at any point between 1995 and 2007?

*  *  *

“A friend asked me to choose one investment that I would want to leave to my great-great-grandchildren. I immediately answered that it would be gold coins. The reason I explained is as follows – corporations can disappear, stocks can collapse, governments can change and they can fall, booms and recessions come and go – but gold is intrinsic money, and no man or nation has ever doubted its value. And they never will.”


Richard Russell


"Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it."


Alan Greenspan

Source: The Burning Platform blog, and Bullion Management Group

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HedgeAccordingly's picture

Interesting graph... Gold is what the ages used for currency when they lent money for interest ..

El Oregonian's picture

The troubling solid bubble of righteous conviction.

Frolf's picture

What I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

Pinto Currency's picture



re. Citi's bailout:


"...But our government’s bailout program was in the hands of the crony New York Fed, where Sandy Weill had served as a Director from 2001 through 2006, and the U.S. Treasury Department, run at that point by Hank Paulson, former CEO of Goldman Sachs.

Instead of nationalizing the bank to protect the taxpayer’s interests, the Wall Street cronies did the opposite; they doubled down to the tune of $326 billion. That’s almost one-third of a trillion dollar commitment to a bank that had $2 trillion on its balance sheet, $1.3 trillion off its balance sheet, zero confidence in the marketplace, a serial history of egregious market violations and a stock value of $20.5 billion.  And, at this point, the SEC knew Citigroup was lying about its exposure to subprime debt and likely shared that with the Fed and Treasury. (See Part One.) ..."

max2205's picture

Looks like my 2 shares of TVIX....fuck you Ben!

Stackers's picture

Lets us also not forget that the merger of Travelers and Citibank into Citigroup was the reason the 1999 Financial Modernization Act was passed and created the TBTF bank.

Fuck you Willem

Publicus's picture

This chart tells me that Citi outperforms gold by a LOT.

TheAnalOG's picture

We come and say that Bitcoin is lurking in the shadow.  Not dead.  Not bubbly.  If we go away you say ran away.  Not hid under like a true blue Zealotry.  Not to be but to come, you walk over each manhole and you wonder now?

DoChenRollingBearing's picture

+ 1 for Bitcoin poetry...

Who knew such a thing was possible?


And if the BTC:Au ratio ever drops back below, say, 2.0, you can always BUY gold with your Bitcoin.

Some Bloke's picture

We bubbled some folks...

RaceToTheBottom's picture

Stop with the Greensppam quotes.  He is a scumbag that has been a willing director of the crash of the world.  One could argue that he is worse than the others cause HE KNEW MORE THAN THEM.

Hang them all

McCormick No. 9's picture

So, according to this chart, Citi, which makes its money by issuing money from thin air and then charging interest, has performed EXACTLY as well as gold. That is IRONIC. So much for "intrinsic value".


OpenThePodBayDoorHAL's picture

"6000-year bubble". Is there any other single, solitary statement, direct from the ivory tower of the nation's most respected economists, that demonstrates more succinctly the complete and utter madness, incompetence, and insanity of today's entire economics profession?

And the question that is completely unasked: would I rather invest in something that has sustained a 6,000-year bubble through all of man's wars and upheavals and crises and revolutions, or one that has only sustained a 7-year or 10-year or 30-year bubble based on bits of paper and fairy dust?


DoChenRollingBearing's picture



That is a great observation!

How can anything valued by man be in a bubble for 6000 years?  These guys are blowing smoke...

DriveByLurker's picture

The other long term bubbles are food and shelter.

MiTasol's picture

I thoroughly approve of your avatar. Dave.

Ghordius's picture

why not? a bubble can last 6 years, 60 years (many fiat currencies lasted that long), 600 years or 6'000 years

that gold has been so long a bubble is an excellent reason to expect it to last longer then our lifetimes

gold was "artificially introduced" in Asia Minor, probably/allegedly in Gordium, by King Midas, by the act of issuing the first gold coins

we know that when Athens started exploiting the Laurium silver mine, it "artificially introduced" silver coins, and one the first monetary wars started

we also know that Sparta was still using iron coins, and Spartans refused to switch to gold or silver, and Athenians laughed about this archaic stubborness, and noted a decline in Spartan trading activity, which led to an increasing trading isolation of Sparta

my theory is very simple: in between, the discovery of how to smelt iron ore "happened"

so the original money was meteoritic iron. very well suited for value storing, and for amazing, godlike weapons, too, with poems like Homer's remembering Achilles' imperviousness to arrows and blows

what Midas did was to back gold coins with... iron and/or a basket of whatever was available, possibly wheat, which comes from the region and was stored in great quantities. and of course he collected taxes and duties in his own gold coins

once launched, those gold coins became the first currency in the modern sense, and became money better suited to trade then sheep or salt, the other "great contenders"


so, to recap:

1) money is a human invention. based on agreements. and has a function, that of price calculation. besides that of value storage (yet if in conflict, trading issues trump value storing issues)

2) a human tradition that is 6'000 years old has the best chances of going on for further 6'000 years

TheReplacement's picture

So you don't believe the big banks will usher in a new 6,000 year reich?

venturen's picture

I believe Wall Street crooks will lead us to the promised land of opportunity creating well paying companies and won't be too greedy and destroy any company , person or government they touch. 

Oh Wait I think I just retched!

Frank N. Beans's picture

great comment, which means that, by definition, gold is not, cannot, and will never be, in a bubble.

Gold is gold.

samcontrol's picture

lol max2205

I have two shares of uvxy for the exact same reasons as you.
What is that a 10k loss? mine is 20k. to $25 might as well laugh.

if we had any balls 2015 will be the year to buy these rigged products. low percentage possibility but super high return casino chip!

My balls go as buying paper physicall phys . It, s all i can do to leave the system in some way. for now. Just cannot bring myself to losing 50% to these fuckers over the years and just give up. I cannot have the phys at home in what is left. So i keep on gambling with cardboard pms.

Frolf's picture

What I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

Pool Shark's picture



Well, everyone knows that the US Dollar is backed by the Federal Reserve, whereas Gold isn't backed by anything:



zerohedgejjxxzz12's picture

"everyone knows that the US Dollar is backed by the Federal Reserve"


I guess through the back door you can say that, but it's purchasing power isn't backed by anything!


meatworm's picture

"Well, everyone knows that the US Dollar is backed by the Federal Reserve, whereas Gold isn't backed by anything:


"Well, everyone knows that the US Dollar is backed by man, whereas Gold is backed by nature."

"Well, everyone knows that the US Dollar is backed by somebody, whereas Gold is backed by everybody."

CrazyCooter's picture

The stalker must have gotten to him ...

Buiter had a PDF which got published on ZH a long time ago, which I liked.

I think the unfortunate reality for any economist in professional employment of anything remotely connected to banking is they slob knobs when they are told, data be damned. Some sell their souls, some move on because they know that old saying is true; don't dip your data in crazy!



unrulian's picture

I clicked on it, it was spam, I am dumb

Impoverished Psychologist's picture

Good chart, very good chart indeed.

Truther's picture

His ass is a bubble. Hate to mess with that shit. Pin his ass already.

new game's picture

wow, gold is fucking "golden"; now just shut the fuck up about gold. go get some and stay shut the fuck up...

Jaspergers's picture

You could go to a blog that often posts about gold, click on an article about gold, log in and leave an angry comment about gold OR you could GTFO and EABOD. Pretty funny that you choose the first option >.<

Racer's picture

Banksters = Snake oil salesmen

disabledvet's picture

No such thing as an energy bubble or a refining bubble either.

Used vehilces are selling big where I'm at. Hold on to your "junker." Or "Junker" as the case may be...

DoChenRollingBearing's picture



Especially Toyota Corollas and Hyundais...

ListenToTISM's picture

Don't forget that Citi bought $45b worth of subprime loans after they had started going bad.

And oddly enough, they received $45b worth of taxpayer money in the bailout. Weird coincidence, aye?


And if they didn't get taxpayer bailout $$$, wouldn't Citi "investors" have lost 100% of their money, not 97.7%? lol And is the reverse split factored in as well? lolololol

Ctrl_P's picture

I would click on your link, but I'm only interested in apathy.

gswifty's picture

Touche! I don't think we'll be hearing from Mr Buiter anytime soon. Exposed as a hypocrite and a tool.

lasvegaspersona's picture

I'm not sure what Greenspan means. Clearly gold is not a currency now. It is a great asset, a store of value and I believe soon to be come the number one reserve. I like gold, I own gold. I say buy gold, lots of it and soon.

But gold is not and I do not believe and fervently hope will never be a currency. Letting governments declare the value of gold by setting the price is just allowing them to manage it lower one more time.

Crisismode's picture


Is that you???

Or did you morph into FOA hisself?

Or maybe, maybe you

are Another in the flesh . . .clarify?



Bay of Pigs's picture

Good question. He said some really strange shit today about Draghi, the ECB and gold.

zerohedgejjxxzz12's picture

Gov's that don't have much will say it's worthless, Gov's that have lots will say the opposite.

 Gov's like fony paper currency, because they can print it.

If you or I had a printing press it would print non stop until the currency became worthless.

 Just like now! 

I sure hope the brics/Russia or China gold back their currency.



highly debtful's picture

If banks are indeed doing God's work, I would like to apply for the position of atheist. With my monthly wage to be paid in Maple Leafs.  

oddjob's picture

As an atheist, there is no group of sheeple to pay you to abuse them.

thegekko's picture

Look, anybody with common sense knows that the piece by Willem Buiter is complete rubbish & without foundation.

But what I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

If he is so right and gold is "worthless" then surely it makes no sense for America to hold their reserves!