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Brodsky On Buffet On Gold

Tyler Durden's picture




 

We have repeatedly voiced our views on Buffett's relentless bashing of the only asset that is a guaranteed protection against now exponential currency debasement and central planner, and other PhD economist, stupidity, most recently here. We are happy that other, more politically correct asset managers, have decided to share how they fell, and take the crony capitalist to task. The first (of many we are sure), are Lee Quaintance and Paul Brodsky of QBAMCO who have just penned "Golden Boy" or the much needed "high society" response to the old man from Omaha: "Buffett may be a sage, a wizard, and an oracle when it comes to nominal relative value pricing of financial assets, but it is well worth noting that Buffett’s proclamations are not necessarily worthy of being considered “fact” in matters unrelated to finance, just as the legendary Joe Paterno’s judgment seems to have been sorely lacking when it came to sorting out matters unrelated to a winning football program....We must assume his aggressive gold comments have been meant to force the price of gold lower. (We do not know why he is so interested in doing so though we do have a reasonable theory, for another time). We strongly disagree with Mr. Buffett’s views and we thought it would be best to explore his comments and provide our counter-arguments."

Selected section from QBAMCO letter:

We think it is imprudent to advise legitimate savers to invest in levered financial assets. The extraordinary relative wealth one may have amassed over the last forty years in the financial markets was most likely legitimized by nominal scale that cannot be sustained in real terms. Such beneficiaries of leverage and inflation typically built very little sustainable capital and innovated nothing. The largest beneficiaries of leverage and inflation had a near infinite funding advantage, either near zero-rate short-term fiat currency funding or very low term funding. Insurers like Berkshire could effectively divert wages from their country’s factors of production (by charging insurance premiums) and reinvest those wages by providing financing to businesses that would maintain their pricing power (through strong branding or demand inelasticity). That great funding advantage is now gone and Mr. Buffett does not seem too happy about it.

 

The narrow gap separating wage growth and asset price growth had to widen following the demise of Bretton Woods. Mr. Buffett may have known about this opportunity earlier and better than almost anyone else because his father, (Howard Buffett, US Congressman from Nebraska), was outspoken in aggressively supporting gold and a fixed exchange currency system. It would be counterproductive and beyond our area of study to try to understand what psychological impulse might compel Mr. Buffett to pursue and achieve lifelong financial success in a manner directly contrary to his father’s views on the value of gold and paper currencies. So we can only guess whether his astounding success in consistently positioning a leveraged inflation portfolio has been the result of a sound pre-meditated strategy passed down from his father or has merely been very ironic.

 

Mr. Buffett’s motivations are not important. He is rich and we think he will always be rich in relative terms because most wealth holders will remain committed to financial assets. Nevertheless, we suspect Mr. Buffet is aware that his wealth is about to be greatly devalued in real terms, just as he correctly foresaw the fate of dot-com billionaires who held their outlets for unreserved credit too long (in the form of corporate shares). Further, we think Mr. Buffett must be aware that the procreative assets he touts are currently priced at multiples of their future nominal cash flows and discounted for almost 0% interest rates, ensuring their future purchasing power will be destroyed in an inflationary environment no matter how much revenue growth they produce.

 

We believe true savers across the world not beholden to Western financial assets understand or will soon understand the difference between relative nominal returns and absolute real returns. They do (or will) not care about the views of very successful leveraged money changers. Yes, an inert rock today will be an inert rock tomorrow. But it will be an even scarcer inert rock tomorrow relative to the fiat currency in which it is priced (same for fine art). Levered productive assets will lose their value against both unlevered scarce inert rocks and unlevered inelastic commodities. The only things they will outperform in a period of great monetary inflation are bonds and cash (both also levered).

 

Mr. Buffett is no doubt brilliant but we respectfully disagree with his sense of real value. We find inspiration in the good sense and graciousness of Sir John Templeton who became fabulously wealthy investing in capital building enterprises and always seemed to maintain an objective and flexible investment perspective.

Full letter (pdf)

 

 

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Mon, 02/27/2012 - 15:52 | 2201384 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

Only makes sense, if you turn your shitty cash into GOLD how will you buy my stock?

Mon, 02/27/2012 - 15:55 | 2201393 spiral_eyes
spiral_eyes's picture

History strongly suggests that bear markets tend to to bottom out when gold hits 1:1 with the DJIA.

At current price levels, gold has a long way to climb, or stocks a long way to fall.

With Benny in charge promising to print and print some more, it looks like gold will climb a lot more than stocks will fall (if they fall at all).

My (slightly tongue in cheek) view is that we'll see DJIA:AU both around $36,000. Maybe BRK.A will end up around that price, too. Sorry Warren.

http://azizonomics.com/2012/02/27/gold-is-still-cheap/ 

Mon, 02/27/2012 - 16:05 | 2201427 redpill
redpill's picture

The old crotchface has lost so much credibility he's not even worth spending the time refuting anymore.  He's a crony capitalist has-been who long ago lost his edge as well as his integrity, if he ever had any, by buying favor with the increasingly fascist union of government and big business.  The best thing the old fucker could do for society is shut his crusty mouth and kick off.

Mon, 02/27/2012 - 16:12 | 2201444 RSloane
RSloane's picture

Yup I agree completely.

I couldn't believe that CNBC gave Buffet three full hours this morning. Becky Slow must have been weighing how severe her chastisement, if any, would be if she slobbered his knob on live television.

Mon, 02/27/2012 - 16:18 | 2201463 Pladizow
Pladizow's picture

Buffets bright, but I choose Gold over Wells Fargo!

Mon, 02/27/2012 - 16:23 | 2201471 I think I need ...
I think I need to buy a gun's picture

if it weren't for the bailouts half of berkshire would be in the atlantic ocean of course hes for the bailouts and of course hes the biggest cheerleaders

Mon, 02/27/2012 - 16:59 | 2201570 nope-1004
nope-1004's picture

Charlie Munger called me a jerk.  FU charlie.

Buffet's been everywhere lately.  Tells me Gold has some real legs under it and it scares the shit out of Benocide and Timmay.  I also think that Buffet is hired by the Fed for PR reasons like this morn. in an attempt to keep the common person away from PM's.

 

Mon, 02/27/2012 - 16:49 | 2201566 Forgiven
Forgiven's picture

I'm glad I'm not the only one who notices Becky salivating for the Buffet.

Mon, 02/27/2012 - 17:16 | 2201662 RSloane
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It was embarassing to watch. I shut it off after ten minutes. I learned that ZH posters had the right take on CNBC all along.

Mon, 02/27/2012 - 17:52 | 2201835 Sokhmate
Sokhmate's picture

the question is would buffet buff the muff?

Mon, 02/27/2012 - 16:47 | 2201559 lasvegaspersona
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redpillguy

I agree with your thoughts, Buffet has lost ALL integrety ( I won't waste the ink detailing his slimy dealings over the years) but being more civilized than you I'm not going to repeat "The best thing the old fucker could do for society is shut his crusty mouth and kick off." (I did copy and paste it however)

Mon, 02/27/2012 - 16:49 | 2201565 redpill
redpill's picture

lol...well maybe reading this will push you over the edge and you'll type it yourself next time :)

 

http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evicted-homeowners-who-emerged-as-winners.html

 

BofA-owning Buffet:  Big Banks are victims of evicted homeowners!!!

 

Can't make this shit up

Mon, 02/27/2012 - 16:55 | 2201581 duo
duo's picture

If BRK was any more crony capitalist, we'd have to call them "GE"!

Mon, 02/27/2012 - 18:40 | 2201979 Don Birnam
Don Birnam's picture

-- A crony capitalist with a taste for leggy tele-milfs, who fawningly worship the very ground he walks on.

Tue, 02/28/2012 - 03:41 | 2202986 RafterManFMJ
RafterManFMJ's picture

 

 

I vaguely recall reading about Buffetts apparently semi-retarded offspring; one guy was given some company stock and sold it all to fund his desire to play guitar on the west coast and be in a band...had he kept it, that stock would have been worth some ten billion dollars...

...I thought, you know, I've not been raised by the Orifice of Omaha, but even so, I would have hedged my bets, and maybe only wasted 75% of my stock...and if my dreams of being a guitar player FUCKING BLEW UP IN MY FACE...hey, I'd still be worth 2.5 billion.

Mon, 02/27/2012 - 23:55 | 2202614 Smiddywesson
Smiddywesson's picture

Green for you sir.  However, I have an observation (though not a criticism) for your opinion, which I agree with.

Perhaps we are being a bit too conservative in that $36k target.  History doesn't provide one single example where the dollar went to zero (except the Confederate currency or the continental) and that makes all the difference.  In nominal terms, gold can go to any price in dollars because the dollar is being destroyed.  

Another point to think about is a caution concerning the DOW.  It is no longer a relevant index with which to measure the economy, so any correlations between it an gold are not reliable.

I still loved your comments.

Mon, 02/27/2012 - 15:56 | 2201397 HoofHearted
HoofHearted's picture

Who is going to do the chart of BRK-A in terms of gold? I think we all know how that will turn out.

Mon, 02/27/2012 - 16:01 | 2201414 spiral_eyes
spiral_eyes's picture

This isn't the chart we want, but it's a start:

http://www.jimslater.org.uk/wp-content/uploads/Gold-vs-Berkshire-Hathawa...

In the last ten years, BRK.A priced in gold has been a big loser, I know that for sure. 

Mon, 02/27/2012 - 16:02 | 2201417 JohnKozac
JohnKozac's picture

Look at True Money Supply Expansion in US, UK Japan and EU:

 

http://blogs.forbes.com/michaelpollaro/austrian-money-supply/

 

 

 

 

Mon, 02/27/2012 - 15:54 | 2201389 Sudden Debt
Sudden Debt's picture

The average man lives to be 82 years old before he kicks the bucket....

Mon, 02/27/2012 - 16:03 | 2201421 Biosci
Biosci's picture

Life expectancy in the West is increasing by ~5h every day.

Just imagine how many tops Cramer will be alive to call.  We're all gonna be rich.

Mon, 02/27/2012 - 16:13 | 2201449 Sudden Debt
Sudden Debt's picture

I'll light one up and drink a good one on that!

Mon, 02/27/2012 - 15:56 | 2201398 jcaz
jcaz's picture

Buffett also thinks houses are cheap-  if he could be the Overlord and manage 200,000 rentals/slaves at once......

So benevolent......  Oh wait, maybe he's just trying to pump the market once more before he drops dead....

Gee, ya think?

Mon, 02/27/2012 - 16:24 | 2201478 Al Huxley
Al Huxley's picture

Yeah, pretty sure that's the case - talking his book. I don't see him rushing out to buy heavily into the housing market he thinks is so cheap. But if the average joe did it would probably help Wells Fargo out.

Mon, 02/27/2012 - 15:57 | 2201401 TideFighter
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Uncle B's "2 for 1" sale, if the "1" is gold.

Mon, 02/27/2012 - 16:41 | 2201540 Steaming_Wookie_Doo
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Yeah, 2 pieces of Uncle Warren's shit for 1 piece of gold...

Mon, 02/27/2012 - 15:59 | 2201405 mayhem_korner
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Great letter.

Mon, 02/27/2012 - 17:00 | 2201592 i_fly_me
i_fly_me's picture

Misters Broadsky and Quaintance should be required reading, imo.

 

Try their "Apropos of Everything:"

http://www.scribd.com/doc/54166765/52483956-QBAMCO-Apropos-of-Everything-I

http://www.scribd.com/doc/67929206/Apropos-of-Everything-II-III

Mon, 02/27/2012 - 16:01 | 2201407 GeneMarchbanks
GeneMarchbanks's picture

Buffoon might as well just tattoo the Fed logo on his forehead. Complete wave of anything he utters.

Via Bloomberg:

'Warren Buffett disclosed that Berkshire Hathaway Inc. (BRK)’s foreign-government debt holdings are comprised mostly of securities from Germany, the U.K., Canada, Australia and the Netherlands, indicating the portfolio has less at risk from higher yielding European sovereign issuers.'

At least he now acknowledges the petrobuck is stalling. Translation: buy bonds on the periphery of Empire to support reversing the collapse. Great strategy.

Mon, 02/27/2012 - 16:01 | 2201411 sbenard
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You were far too kind to the Billionaire Buddy of tyranny!

Mon, 02/27/2012 - 16:02 | 2201420 Caviar Emptor
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Late in the history of empires prophets and visionaries proliferate. They get their day up on the soap box but it ends soon enough. Uncle Warren has been trying to pass himself off as Aristotle, and now he's trying to be a peace guru, urging people to believe in his cult of paper, aka the paper economy that's hanging by a thread. 

Mon, 02/27/2012 - 16:04 | 2201426 SilverRhino
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Silver Buffetz!!

Mon, 02/27/2012 - 16:08 | 2201434 williambanzai7
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THE ORACLE

Mon, 02/27/2012 - 16:11 | 2201441 azzhatter
azzhatter's picture

Where does Becky sit?

Mon, 02/27/2012 - 16:49 | 2201568 Joe Davola
Joe Davola's picture

Where's the magazine rack?

Mon, 02/27/2012 - 16:22 | 2201469 Pladizow
Pladizow's picture

She's circling the drain beneath!

Mon, 02/27/2012 - 16:14 | 2201455 RSloane
RSloane's picture

Haha! What's in the toilet has value parity with what's coming out of his mouth.

Mon, 02/27/2012 - 16:14 | 2201456 Vincent Vega
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WB7, I always enjoy your work but Jeez...this picture may leave a mental image scar.

Mon, 02/27/2012 - 17:09 | 2201617 TruthInSunshine
TruthInSunshine's picture

wb7, can you PS Buffett in a bubble bath, talking on the phone with Becky B. Quick, as he buys preferred stock warrants of BofA, maybe with a big oil painting of ObaMao on the wall?

Maybe Becky B. Quick and Joe Kiernan and the whole cnBSc motley crew can fit in Grandpa Warren's bathtub whilst they interview him for the 80th time this year?

Mon, 02/27/2012 - 18:46 | 2201986 Don Birnam
Don Birnam's picture

Mesh A-shirt...very stylish. Kool & the Gang, circa 1980 ? Or was it Parliament Funkadelic ?

So Uncle Warren has been making some untoward comments regarding gold, eh ?

Potty mouth.

Mon, 02/27/2012 - 16:10 | 2201438 azzhatter
azzhatter's picture

Who even listens to the old fraud cocksucker anymore? I would ask him if he gets a discount on depends for his pumping of P&G

Mon, 02/27/2012 - 16:11 | 2201440 TheSilverJournal
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The dollar became the world’s reserve currency by promising the central banks of the world that $35 would be forever exchangeable for an ounce of gold. The US proceeded to counterfeit gold by printing more notes redeemable in gold than actually gold existed, and those counterfeit notes gained their value by stealing it from actual gold. Now that the counterfeiting scam is coming to an end and the counterfeit notes are in the process of being revealed as worthless, much of the value stored in the counterfeit notes will flow back into actual gold.

TheSilverJournal.com

Mon, 02/27/2012 - 17:45 | 2201794 Likstane
Likstane's picture

You just said in 3 sentences what most do in 10 paragraphs!  

Mon, 02/27/2012 - 16:16 | 2201459 Eally Ucked
Eally Ucked's picture

Mr. Buffet is one generation ahead of baby boomers. He was positioned vere nicely to benefit from demographic boom when boomers started to look to invest their surplus in something which would make them more money. It's not of his doing that stock market and all financial assets went thru the roof at that time. Meanwhile America got rid of productive assets, boomers started to draw on their savings and the next generations are much smaller, and prospects on saving anything disapeared. So we will see his succesors reapeting his achievments? I don't think so. 

Mon, 02/27/2012 - 16:18 | 2201464 zebrasquid
zebrasquid's picture

Warren Buffoon?  He's still alive?

Mon, 02/27/2012 - 16:27 | 2201487 mick_richfield
mick_richfield's picture

He's clinically alive.

Mon, 02/27/2012 - 16:21 | 2201467 ZIRPThis
ZIRPThis's picture

Buffet is a hypocritical hack of the highest order.  He's only trying to talk down gold to attempt to temporarily shift investors into equities...preferrably Berkshire equities...while trying to push down the price of gold, so that when the collapse comes he'll have the most cash possible to buy the most amount of gold at the lowest price.

Mon, 02/27/2012 - 16:21 | 2201468 TideFighter
TideFighter's picture

He either reads slow on the johnny or is constipated.

Mon, 02/27/2012 - 16:28 | 2201488 Dick Gazinia
Dick Gazinia's picture

He's gonna blow an "O" ring.

Mon, 02/27/2012 - 16:22 | 2201470 taniquetil
taniquetil's picture

Obama will be trotting out Warren Buffet's secretary in another piece-of-shit spiel about reducing deficits within the week.

Mon, 02/27/2012 - 17:25 | 2201608 TruthInSunshine
TruthInSunshine's picture

Obama's re-election tripe speeches this year will be riddled with:

"And my good friend, Warren Buffett, blah blah blah blah....."

 

So there's that to look forward to....   </sarc>

 

Mon, 02/27/2012 - 16:22 | 2201472 williambanzai7
williambanzai7's picture

WISDOM OF WARREN

Mon, 02/27/2012 - 16:23 | 2201476 zebrasquid
zebrasquid's picture

He's  "It's A Wonderful Life"s  Mr. Potter...just with a little sweeter personality.

 

I've been following him since the late '70s.  He had some good ideas, nothing special really.  Just caught the sweet spot of the 30 year market boom.

I mean, come on, he missed most of the great stocks of that era (tech) chasing stuff like Coke and American Express.

 Whatever he used to have on the ball has long since passed its expiration date.

Mon, 02/27/2012 - 16:52 | 2201574 njrod
njrod's picture

False!  Mr Potter was the hero in that movie!  Where would you want to live, Bedford Falls or Pottersville, where there was industry, jobs, and market oriented interest rates?

Mon, 02/27/2012 - 16:25 | 2201480 devo
devo's picture

Buffet's been everywhere the past few days. Sign he's desperate.

Mon, 02/27/2012 - 16:49 | 2201571 williambanzai7
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THE ORACLE 2

Mon, 02/27/2012 - 17:18 | 2201651 RSloane
RSloane's picture

Perfect, WB. Apparently Becky and Warren are into exchanging each other's wardrobes.

Mon, 02/27/2012 - 18:52 | 2201995 Don Birnam
Don Birnam's picture

This Buffett character is quite the cad. Clearly, a penchant for the leggy, "Brazilianed" ones.

http://images.huffingtonpost.com/2011-03-05-HathawayEffect2.jpg

Mon, 02/27/2012 - 17:25 | 2201701 devo
devo's picture

Can we see him in Lady Gaga's meat dress?

Mon, 02/27/2012 - 16:31 | 2201501 Confundido
Confundido's picture

Look, the whole discussion about gold is as fucked up as that about money by the ancient greeks. Just like they used to say that money was sterile (i.e. Aristotle), these idiots today say that gold does not give a dividend, nor can we eat it. As if one could it printed US dollars! 

VERY SIMPLY, what we have is that the world needs someone to provide a service called: fungible, efficient, storage of value. It is a TANGIBLE service. If fiat currency cannot provide it in the margin, gold will. What is so fucking difficult to understand about this????

Nobody expects the provider of fungible, efficient, storage of value services to give a dividend. Nobody expects the same provider to provide you with food to eat! What fucking nonesense is that?

 

Mon, 02/27/2012 - 16:44 | 2201548 devo
devo's picture

There's nothing difficult to understand about it. Guys just want everyone to buy stocks.

Mon, 02/27/2012 - 17:02 | 2201604 Moe Howard
Moe Howard's picture

R We Not Men?

Mon, 02/27/2012 - 16:37 | 2201527 Immortal Flatulence
Immortal Flatulence's picture

Maybe he's pissed he didn't make what he could of if he held his silver (he had 37% of the worlds known supply???) until it was REALLY up. If he had kept it, f omaha, we'd call him the oracle of everything!

http://www.silvermonthly.com/analyzing-warren-buffetts-investment-in-silver/

Mon, 02/27/2012 - 16:44 | 2201549 Mitchell
Mitchell's picture

How many chances do these guys get on Wall Street to appear legitamate and upstanding.  Paul Brodsky is just a guy who blew up his mortgage hedge fund before the crisis even got started for real.  Now he's some sort of sage of markets and macro and a great philosophiser?  I think not.  Dude, where's my high-water mark?

Mon, 02/27/2012 - 16:44 | 2201550 rosiescenario
rosiescenario's picture

After his U.S. Air fiasco, I never listened to anything he has to say....that was a clear sign he was disconnected from reality.

Mon, 02/27/2012 - 16:49 | 2201572 earleflorida
earleflorida's picture

"Mutual Assured Destruction", [MAD] is he!

Mon, 02/27/2012 - 17:06 | 2201619 DiamondDog
DiamondDog's picture

One angle I would like to see a comment on is the gold to platnum ratio. Should gold cost twice as much as platnum? If it should then is platnum a deal right now or is gold over priced?

any wisdom?

 

 

Mon, 02/27/2012 - 17:32 | 2201717 Sean7k
Sean7k's picture

http://www.ibtimes.com/articles/294594/20120207/platinum-gold-ratio-plunges-buy-signal-new.htm

Just remember, value is subjective. Scarcity is not the only reason an item has value. 

Mon, 02/27/2012 - 18:19 | 2201924 rosiescenario
rosiescenario's picture

Platinum is by far more scarce than gold and it has many unique industrial applications for which there is no substitute. There are only about 4 decent sized mines in the world and one of those in So. Africa right now is having some major labor issues.

 

In theory platinum should (and historically was) priced above gold. In the old days one would be short gold and long platinum given the current pricing differential.

 

In reality gold and silver are what folks are buying to hedge the destruction of fiat. Too many "investors" think of platinum's price as being purely driven by industrial demand.

 

I owned Rustenberg for many years many years ago and still own the metal itself. Today I buy silver mining stocks because silver is in vogue.

Mon, 02/27/2012 - 17:18 | 2201655 Wakanda
Wakanda's picture

Wait!  You mean that....

TD is not "high society"?

ZH is low society?

I'm posting in a ghetto?

This is a (oxymoron alert) PM ghetto?

Mon, 02/27/2012 - 17:19 | 2201682 goldenboy
goldenboy's picture

Cheeky sods, they nicked my monikker....can I sue? For what it's worth, my brief knee-jerk response to the Buffett BS was penned a week ago and published at:   www.asymptotix.eu/blog

Mon, 02/27/2012 - 17:52 | 2201833 Likstane
Likstane's picture

That's good stuff there, Goldenboy.  You're a smart dude.

Tue, 02/28/2012 - 10:11 | 2203507 goldenboy
goldenboy's picture

Most kind. Thank you.

Mon, 02/27/2012 - 17:26 | 2201690 gwar5
gwar5's picture

I loved the Joe Paterno comparison. But methinks Warren is simply pot committed to the fiat system and being overtly deceitful on gold. However, Brodsky and QBAMCO are officially added to my hero list because they called the crony Nebraska windbag a fraud without actually resorting to the "F" word.

 

Howard Buffett was pretty cool, the Ron Paul of his day. Warren must have been dropped on his head.  

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

 

 

 

 

 

Mon, 02/27/2012 - 17:46 | 2201806 cooperbry
cooperbry's picture

Or, maybe Buffet just wants to scare people out of Gold so that he can buy up a bunch and appologise later to his letter readers.

Mon, 02/27/2012 - 17:48 | 2201810 BLOTTO
BLOTTO's picture

Good job on the pics William.

and in general, solid comments and good points made...

Mon, 02/27/2012 - 17:51 | 2201825 JW n FL
JW n FL's picture

 

 

http://www.youtube.com/watch?v=NjvbA-Xebfg&feature=channel_video_title

this guy loves warren.. he explains why!

Mon, 02/27/2012 - 18:10 | 2201895 rosiescenario
rosiescenario's picture

Jeesh...just read his latest statement delievered by B'berg....so it was the homeowners who ripped off the banks.....

Mon, 02/27/2012 - 18:18 | 2201919 Ted Baker
Ted Baker's picture

WHO CARES WHAT HE SAYS?

Mon, 02/27/2012 - 22:35 | 2202467 Alpha Monkey
Alpha Monkey's picture

A whole lot of ignorant middle class+ who think the economy is sound because the dow is at 13,000.

Mon, 02/27/2012 - 18:47 | 2201988 WryObserver
WryObserver's picture

Warren Buffet's Berkshire Hathaway has tremendous exposure to currency fluctuations. Their hedges must be growing ever more expensive, and may not be completely adequate. A lower gold price means a stronger dollar. A higher gold price implies dollar (and other currency) weakness. Uncle Warren is speaking out of his wallet, and it may have very little to do with how he actually thinks. If he can convince enough institutions or people, his prophecy can become self-fullfilling.

Public comments by those who are influential must always be filtered by how the commenter stands to gain from others believing and acting on their comments. In this case, Warren Buffet needs for gold to go down, and for there to be confidence in the dollar. He is doing everything he can to protect himself. I don't believe for a moment he is a dispassionate observer. In other words, he cannot be trusted.

Mon, 02/27/2012 - 19:22 | 2202049 zerotohero
zerotohero's picture

I would tend to believe the old nut has a shit load of PM somewhere - why wouldn't he.

Mon, 02/27/2012 - 19:38 | 2202095 WryObserver
WryObserver's picture

He doesn't need to buy actual gold when he can buy the paper version. He is probably looking to acquire a massive amount more, but only after he can drive down the price. He isn't truly a contrarian indicator yet, but he sure is getting close.

Mon, 02/27/2012 - 19:53 | 2202127 engineertheeconomy
engineertheeconomy's picture

Warren has so much physical GOLD that the planet wobbles as it spins

What do you think caused the tsunami in Japan?

Tue, 02/28/2012 - 07:25 | 2203136 BidnessMan
BidnessMan's picture

He built up a very large Silver position a while back but then sold it.  At least claims that it was sold.  I surmised if he got out of silver because it compromised his public commitment to financial assets.  Expect he still has some squirreled away - sort of like Oprah's bag lady fund.

Tue, 02/28/2012 - 07:34 | 2203145 BidnessMan
BidnessMan's picture

He built up a very large Silver position a while back but then sold it.  At least claims that it was sold.  I surmised if he got out of silver because it compromised his public commitment to financial assets.  Expect he still has some squirreled away - sort of like Oprah's bag lady fund.

Mon, 02/27/2012 - 19:59 | 2202141 graspAU
graspAU's picture

Whenever I see Buffet, I think of him in this picture with a Rothschild.

 

http://media.nowpublic.net/images/e4/5/e4594d60413a45a3aa6d436d4ae5bac0.jpg

Mon, 02/27/2012 - 21:57 | 2202383 dolph9
dolph9's picture

I don't think Buffet is necessarily a bad man.  Even in his opportunism, he was relatively straight.  He's no banker or politician.

But he's definitely a product of his times.  He's part of a group of well connected people who rode the rising might of American financial fiat dollar empire like a gravy train.

And their time is finished.  These geezers will croak before most of the people here do.  They'll be fertilizer and in the annals of history barely show up as a footnote.  Can't you sense the desperation in the increasingly nonsensical stuff that spews forth from their mouths?

Now it's time for the metal men to take over.  And I suspect that our time will be a very long one.

Mon, 02/27/2012 - 23:17 | 2202549 WryObserver
WryObserver's picture

"I don't think Buffet is necessarily a bad man. Even in his opportunism, he was relatively straight. He's no banker or politician."

I have followed Warren since before he became famous because of my study of Benjamin Graham's methodology. I think he used to be the way you described.

In the last several years though, he has shifted into cheerleading for a particluar position that would benefit him financially. Reread his annual letters to Berkshire Hathaway shareholders. He would tell stories about his companies in a very folksy way, and share what the challenges or opportunities were for his companies. He would never advocate for a change, or new law, or try to lead people to a conclusion about the future of the capital markets.

Not anymore. He is actively lobbying and attempting to use his clout to gain an advantage. He is now a defacto banker insofar as his insurance company holdings, and he is in fact a politician, trying to lead people down a path or to a conclusion that will benefit himself. He has also become more opaque about some of the holdings and trades that he or his company make. It has gotten to the point that I do not trust him or his motives. It makes me sad to say this, but I believe he has become part of the problem. He is no longer a part of the solution.

Mon, 02/27/2012 - 23:47 | 2202605 trickyrick
trickyrick's picture

Pay attention to what Warren Buffet does, not what he says.  Berkshire Hathaway just completed the purchase of another refining company to add to its impressive roster of manufacturing, importing, wholesale, and retail jewelry companies.  While Warren may not be a fan of buy-and-hold gold, he certainly is impressed with the metal's commodity aspect.

Tue, 02/28/2012 - 01:47 | 2202839 Fozzy Slippers
Fozzy Slippers's picture

Don't these Illuminati POS ever die? I'm sick of that little pricks face.

Fuck you Buffett!

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