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Buffett Releases Annual Letter To Shareholders, Will Avoid Derivatives Going Foward, Continues Bashing Gold

Tyler Durden's picture


While mostly a regurgitation of old, very trite, and quite meandering thoughts, there are some tidbits of information in the latest just released 2011 Berkshire Letter to shareholders such as that Buffett has chosen a successor to the 81 year old increasingly more confused head (unclear who), that Buffett is on the prowl for large acquisitions, that he hopes IBM shares languish for the next five years (frankly we can't wait until Buffett opens a stake in Apple so he can control the two stocks that between them account for about half of the moves in the DJIA and the NASDAPPLE - after all "economies of scale" is all about how Nominal Buffett exudes 'success'), that he once again sees a housing bottom (he adds: "Last year, I told you that “a housing recovery will probably begin within a year or so.” I was dead wrong" - this admission is far more than we will ever hear from James Cramer who has been calling a housing bottom since 2009), and "Housing will come back – you can be sure of that" - sure, just not in your lifetime, and probably not in ours either, but most importantly, is the discovery not that BRK's profit declined by 30% (to $3.08 billion from $4.38 billion) on a smaller gain on derivatives, but that since he actually will have to post collateral on new derivatives, "we will not be initiating any major derivatives positions." The reason: "We shun contracts of any type that could require the instant posting of collateral. The possibility of some sudden and huge posting requirement – arising from an out-of-the-blue event such as a worldwide financial panic or massive terrorist attack – is inconsistent with our primary objectives of redundant liquidity and unquestioned financial strength." So his warning that derivatives are WMDs years ago was only appropriate if there was money to be lost, such as is the case for 99.9999% of other investors? Ah, there goes the good old hypocritical, crony Warren we have all grown to known and love. And finally what would be a recent Buffett missive without the obligatory gold bashing section: after all, how will the Ponzi scheme inflate if people have realized it is a ... well, Ponzi, championed by none other than the person everyone once thought was actually an investing genius. Fast forward to Buffett's 2020 Letter (when Greek debt/GDP is precisely 120.5%) his main message will be: "I told you to run away from gold. I was dead wrong."

On gold bashing:

The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.


This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.


The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.


What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis.


As “bandwagon” investors join any party, they create their own truth – for a while. Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”


Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A. Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge).


Can you imagine an investor with $9.6 trillion selecting pile A over pile B? Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.


A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.


Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

And so on. For a much more objective discussion on inflation protection, we strongly urge readers to read Jeremy Grantham's quarterly letter released yesterday. That and the previous 3 years of posts on ZH.

Perhaps while he is being Monday Morning quarterbacking on the mistakes of his career, it would also be wise for Buffett to admit that not he, but his farther was spot on on the topic of gold. That and leaving this world with some dignity, instead of being known as a shining crony beacon for a system that is implding more and more every day, and needs $14 trillion in central bank support (and rising exponentially) to prevent an all out implosion.

Full letter (pdf)



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Sat, 02/25/2012 - 11:44 | 2195528 Cheyenne
Cheyenne's picture

Suck it up 'til you're dead, Warren, you fraud.

Sat, 02/25/2012 - 11:50 | 2195540 resurger
resurger's picture

By Jeff Clark, Casey Research

hear that you've had some worries about me. I understand. Your world is a very uncertain place right now. And when it comes to money, it looks as though your leaders don't understand some basic monetary principles, making things even more unsettling.

But I want you to know that the problems you're experiencing are actually nothing new. I've seen these monetary, fiscal, and economic difficulties many times before. And I can tell you this: you're safe with me. That's a bold proclamation, but I've provided monetary protection numerous times throughout history – too many to count, in fact. I've served all kinds of people over the centuries, from kings and counts to serfs and servants.

To put your mind at ease, let's review my core characteristics, along with some history, to show how I can protect you against the monetary danger that's likely to worsen in your near future. We'll also take a look at your peculiar set of circumstances to see how I can be of service. By the time we're done, I think you'll feel much better about my ability to help your portfolio withstand whatever is thrown its way.

Enduring Characteristics

Let's start with the basics. I have some characteristics that no other matter on Earth has… I cannot be:

  • Printed (ask a miner how long it takes to find me and dig me up)
  • Counterfeited (you can try, but a scale will catch it every time)
  • Inflated (I can't be reproduced)

I cannot be destroyed by;

  • Fire (it takes heat at least 1945.4° F. to melt me)
  • Water (I don't rust or tarnish)
  • Time (my coins remain recognizable after a thousand years)

I don't need:

  • Feeding (like cattle)
  • Fertilizer (like corn)
  • Maintenance (like printing presses)

I have no:

  • Time limit (most metal is still in existence)
  • Counterparty risk (remember MF Global?)
  • Shelf life (I never expire)

As a metal, I am uniquely:

  • Malleable (I spread without cracking)
  • Ductile (I stretch without breaking)
  • Beautiful (just ask an Indian bride)

As money, I am:

  • Liquid (easily convertible to cash)
  • Portable (you can conveniently hold $50,000 in one hand)
  • Divisible (you can use me in tiny fractions)
  • Consistent (I am the same in any quantity, at any place)
  • Private (no one has to know you own me)

I am internationally accepted, last for thousands of years, and probably most important, you can't make any more of me.

read more

Sat, 02/25/2012 - 11:55 | 2195548 Future Tense
Future Tense's picture

Excellent post Jeff.  It is strange that Buffett continues to hold such a large cash holding (not diversifying into gold) when he clearly understands the nature of the markets (which could be seen with his silver purchase back in 1999).  Someone needs to send Buffett this excellent video that asks if you should hold gold or cash in a safe over the next 5 years:

Sat, 02/25/2012 - 12:00 | 2195557 spiral_eyes
spiral_eyes's picture

Yes gold is awful. Not only is it a bad investment — having consistently obliterated the S&P over the last decade (when was the last time gold over-compensated its CEO? Or co-mingled customer funds? Or took a bailout because its business model had failed? Or was caught hold triggered CDS? Or caused Deepwater Horizon?), it should be obvious to anyone who can read a chart that only fiat currency can truly deliver price stability.

Or um... not.

Sat, 02/25/2012 - 12:23 | 2195594 trav7777
trav7777's picture

Buffet is a moron.  Gold produces NO DIVIDEND people.  These days, neither do most financial assets.  Including most gov't paper.

And this compounding...LOL.  Buffet still thinks we are going to grow grow grow.  At this point, he knows he'll be dead long before the proof ever manifests, so he can afford to just tout the optimistic line.

Sat, 02/25/2012 - 12:37 | 2195631 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Correct, and because it has no dividend it is considered an aggresive growth investment.  And I agree, becaue it has shown aggresive growth.

Sat, 02/25/2012 - 12:40 | 2195645 Harlequin001
Harlequin001's picture

Since when does it need to produce a dividend?

and since when did anything else other than through printing more money?

Sat, 02/25/2012 - 13:24 | 2195710 I think I need ...
I think I need to buy a gun's picture

i remember when warren pulled his tickets to his event so no one could make a profit on ebay, a small profit at that, these guys are really nuts AND THEY WANT IT ALL, it doesn't even make any sense i can hold a dollar or hold a flake of gold whats the fucking diffence they are both in the bank sitting i can't eat either.                                        FUCK YOU WARREN!!!!!!!!!!!!!!!!!!!!!!!!!When gas is $10 and a steak is $35 can i bring the kids to visit so we can fuckin eat???????????????????/

Sat, 02/25/2012 - 15:06 | 2195732 Don Birnam
Don Birnam's picture

One wonders if Uncle Warren's personal media courtesan and professional drawer of baths, Rebecca Quick, if presented with the choice, would prefer a properly-assayed, yet non-procreative, 1 kilo pile of Credit Suisse's .999 finest, or the equivalent in multicolored, paper legal tender ?

Sat, 02/25/2012 - 17:49 | 2196252 earleflorida
earleflorida's picture

becky is a fine [hot!] looking woman, period!

although, can't quite figure out why she's on cnbc -- just sits in the corner looking at the camera - such a waste


Sun, 02/26/2012 - 09:31 | 2197483 Chuck Walla
Chuck Walla's picture


becky is a fine [hot!] looking woman, period!

although, can't quite figure out why she's on cnbc -- just sits in the corner looking at the camera - such a waste



Yep, that girl needs a brass fire pole sumthin awful. long as she gonna Ho fo' Warren da Pimp, she need to look the part, feel me?

Sat, 02/25/2012 - 13:36 | 2195735 Rogier
Rogier's picture

I think you need some soap to wash out your mouth.

Sat, 02/25/2012 - 12:37 | 2195632 Harlequin001
Harlequin001's picture

'an out-of-the-blue event such as a worldwide financial panic' - and there you have it, as close to an apology for what is about to happen as you will get...

Sat, 02/25/2012 - 12:47 | 2195649 The Big Ching-aso
The Big Ching-aso's picture



"......unquestioned financial strength."

What a douchewoggle.

Sat, 02/25/2012 - 13:18 | 2195700 Careless Whisper
Careless Whisper's picture

"Stop bitchin' about a little bail out." Charlie Munger, 2008.  (4 real)

Sat, 02/25/2012 - 12:50 | 2195653 BidnessMan
BidnessMan's picture

Wow!  First of your posts I have ever agreed with. Something big must be about to happen. 

Sat, 02/25/2012 - 19:23 | 2196391 s2man
s2man's picture

Yeah.  That was weird.

Sat, 02/25/2012 - 12:28 | 2195601 nope-1004
nope-1004's picture

Buffett was a particular personality during a pariticular time.  His success was largely due to the economic and structural circumstances, not personal aptitude.  You can see now that if he were just starting out, he'd not only be broke, but shunned in the investment community.

A true oracle would know when his time is up and would step aside.  Since he doesn't, his future demise will be played out and analyzed publicly for all to see.


Sat, 02/25/2012 - 12:31 | 2195621 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

True oracles can change their philosphy ahead of trends.  They can see the next trend before it happens.  That is an oracle.

Sat, 02/25/2012 - 18:23 | 2196296 TheSilverJournal
TheSilverJournal's picture

While it is entirely possible, as Buffet says, that gold “will compound over the century at a rate far inferior to that achieved by productive assets,” currency collapse isn’t happening 100 years from now, it is happening now. Give me gold. No, give me silver, which is more undervalued and has greater demand in industry, therefore meeting another criteria of Buffet’s as a good investment.

Sat, 02/25/2012 - 12:54 | 2195659 Colombian Gringo
Colombian Gringo's picture

His success was due to being an connected insider. If you were able to access billions practically cost free and get tipped off on deals, you would also be rich.

Sat, 02/25/2012 - 15:59 | 2196063 Don Birnam
Don Birnam's picture

Absolutely correct, nope-1004.

Sat, 02/25/2012 - 13:44 | 2195756 williambanzai7
williambanzai7's picture


Sun, 02/26/2012 - 08:58 | 2197434 MFL8240
MFL8240's picture

Who really knows what that liar holds in offshore accounts.  Believe nothing that comes out of Obamas mouth or Buffetts, they are total phony's.

Sat, 02/25/2012 - 13:29 | 2195699 SMG
SMG's picture

Buffet is wrong of course.

He is one of the Oligarchs though, and therefore has inside info on "The Oligarch Master Plan (tm)".

He keeps attacking gold publicly for a reason,  I would bet he knows something, ie. a planned takedown.

Which would be fine by me, I would just use the opportunity to increase the stack.

Don't know this for sure, just thinking out loud.

Sat, 02/25/2012 - 14:24 | 2195882 palmereldritch
palmereldritch's picture

If not a planned takedown then their tried and true firewall of forced confiscation.  They've done it before...probably the last time they thought they could roll out global consolidation...and then Hitler went off script.

Sat, 02/25/2012 - 16:04 | 2196076 chubbar
chubbar's picture

The last time they confiscated gold they had a good (in their opinion) legitimate reason, they couldn't overcome the deflation without increasing the money supply. Since that isn't a problem any longer, what reason will they have to outlaw gold, assuming they actually have a constitutional right to control private ownership of a metal (I know they think they have this authority)? With widespread ownership in India, China and other lesser populated countries it would make the U.S. Gov't (the beacon of world freedom) pretty damn stupid looking. To say nothing of the black market that would pop up because NOBODY and I mean NOBODY is going to turn their metal into these bunch of fucking crooks. If they are coming for your metal it means they are killing your family and any chance they had to provide for themselves outside of serfdom. Might as well fight as put up with that shit.

Sat, 02/25/2012 - 16:38 | 2196126 palmereldritch
palmereldritch's picture

I think the New World Order starts for them in the New World of North America. The US and its Constitution is that beacon of freedom that has been in their cross hairs for a long time. 

Interesting that GMO food is force fed to the population here now with, it is proposed, proper labelling and identification of the toxic sterilizing Frankenfoods being barred by law while in Europe it must be identified.  I will give the EU apparatchicks credit for that one. IMO, NA is a different type of social engineering takedown with an emphasis on what appears to be de-population. Maybe Bill Gates plans on being the game warden when all the re-wilding is complete...

Sun, 02/26/2012 - 09:38 | 2197489 Chuck Walla
Chuck Walla's picture

@chubbar  They don't mind stupid if it means they survive. Look at the crap that comes out of Obama.  All the world knows what a crock he is usually spouting, but here, the compliant, antique media gulps down load after load praying for more.  And the deliberately  undereducated believe

Sat, 02/25/2012 - 15:09 | 2195892 JW n FL
JW n FL's picture



I am internationally accepted, last for thousands of years, and probably most important, you can't make any more of me.

read more

but.. But?! BUTT??!! you still cant fold it or eat it!

Warren is getting old..

have a heart..

he either has to carry Gold, which is metal.. or fold paper in his pocket..

once again! he is old, he has had a rough life filled with bribing / lobbying the whores in Washington DC..

paper is easier for his old worn out bones.


"You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out..."

Sat, 02/25/2012 - 19:35 | 2196423 halflink123
halflink123's picture

I do agree with WB in one respect: it's dangerous to buy any asset regardless of price.  

See, the problem is, WB belives gold is NEVER a worthwhile investment, at ANY price, despite its obvious powerful historical monetary properties.

Meanwhile, zerohedge readers believe that gold is ALWAYS a worthwhile investment, at ANY price.

Either view is dangerously similar to the other.

Therefore I disagree with ZH and WB! Cool, huh?

Sat, 02/25/2012 - 12:28 | 2195612 JD59
JD59's picture

Buffet wants to keep his fiat dullars valuable.

Sat, 02/25/2012 - 12:29 | 2195615 JD59
JD59's picture

Buffet wants to keep his fiat dullars valuable.

Sat, 02/25/2012 - 12:39 | 2195639 LongSoupLine
LongSoupLine's picture



Q. What do Buffett and a child molester in a Santa suit have in common?


A. Sure they both look and act harmless and trusting, but...

Sat, 02/25/2012 - 13:02 | 2195670 brewing
brewing's picture

You cannot become what you despise. Subconsciously, you sabotage your own ability to accumulate wealth if you hold grudges or jealousy...

Sat, 02/25/2012 - 13:08 | 2195679 gibbs
gibbs's picture

A drunk could steal your wallet and feel guilty about it but people like buffet will steal your wallet and then offer to help you find it.

It's pretty easy to be a so called "great investor" when you have puppets in DC to bail out your bad nvestments, feed you inside information and keep your get-out-of-jail free card up to date.

Sat, 02/25/2012 - 13:25 | 2195716 rbg81
rbg81's picture

Whatever credibility Warren Buffett once had, he has completely lost.  He is now nothing more than a tool of the Socialists in general and the Obama Administration in particular.  Whenever I hear anything coming out of his mouth, I try to do the opposite.  As Chris Christie said, WB should just write a check and STFU.

Sat, 02/25/2012 - 19:29 | 2196402 halflink123
halflink123's picture

Umm...who do you think Christie works for?  People like Warren Buffett.

Christie believes in corporate socialism, aka crony capitalism, just like Buffett and Obama.

If you think there's any difference between the mainline establishment Democrat or Republican parties, you are dead wrong.

That's why most people on this site or with some sentience only want for RON PAUL to win. 

Sun, 02/26/2012 - 09:49 | 2197496 Chuck Walla
Chuck Walla's picture

Whatever credibility Warren Buffett once had, he has completely lost.  He is now nothing more than a tool of the Socialists in general and the Obama Administration in particular.


Remember, Obama and his ilk ARE NOT SOCIALISTS!  These are good Capitalists, they are not giving up what's theirs. They mean for everyone else to give up what they have to the Obama's, et al.  They only mean to enslave us plebes, not disadvantage the kleptocracy and its hangers on.  No, Braack talks like a Socialist to hold his idiot base, such pretty words, free gifts for all.  But like Warren, when it comes time to throw down cash into the pot, not a chance.  Not when they have such a large pool of unwitting suckers to fleece.  Talk is far cheaper and he's a 1% hero to the ignorant.

Sat, 02/25/2012 - 13:50 | 2195772 midtowng
midtowng's picture

Buffett is 100% correct that $9 Trillion in farmland and Exxon-type companies is worth more than $9 trillion in gold.

What Buffett gets wrong is to compare gold to farmland. Gold is only in competition with one thing: paper money.

So the real question is: why is Buffett holding paper money, and why does he prefer it to gold?

Sat, 02/25/2012 - 19:30 | 2196407 halflink123
halflink123's picture

Exactly right. Buffett is using a straw man argument, a false analogy.

The only question is, which measure of money to use in comparing it with gold + other metals, and why hasn't this ratio remained more or less constant throughout time?

Sat, 02/25/2012 - 23:47 | 2196845 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Gold is not the only thing in competition with paper money.  With that line of reasoning, anything you exchange paper money for is in competition with it.  I think Buffet has a point about gold.  If you think there is likely to be a currency crisis and hyperinflation then dividend paying energy stocks are better than gold because they are backed by hard assets that throw off cash.  Based on negative rates of growth in disposable income and the present low yields on AAA corporate paper, we are not even close to a hyper-inflation scenario.   So just be patient and wait for the bust in the stock market because, once rates start to rise, you will be able to back up the truck for the NYSE once a century 85% off sale.

Sat, 02/25/2012 - 13:54 | 2195783 LasVegasDave
LasVegasDave's picture

what crony capitalist numero uno fails to mention is that anyone can buy gold.  not everyone can afford 1000 acres of farmland.



Sat, 02/25/2012 - 15:00 | 2195957 prole
prole's picture

True true, he also failed to mention that you can own, really own gold and silver. Big Brother owns 100% of the farmland you can only rent it. And big brother can up the rent at any time to any level he likes. Then kick you  out and not let you pretend you own it anymore.

Sat, 02/25/2012 - 23:07 | 2196851 Lucius Corneliu...
Lucius Cornelius Sulla's picture

No, but $1700 will buy you about 17 shares of Chevron.

Sat, 02/25/2012 - 11:48 | 2195529 SilverDoctors
SilverDoctors's picture

He's just bitter and resents PM's now because he was blackmailed into dumping his silver position.  Heck, maybe ole Warren was the buyer on the other side of the cartel dumping 102.5 million ounces of paper silver on the Globex in 7 minutes yesterday afternoon, only to see the raid fail as somebody had a buy algo ready for the raid!

Sat, 02/25/2012 - 11:55 | 2195546 Deo vindice
Deo vindice's picture

If Mr. Buffet had to do all his investing under the same rules as 'normal guys' just how much wealth would he have?

Regardless, you can't take it with you, Warren.

"What shall it profit a man if he gain the whole world and lose his soul?" (Matthew 16:26)

Sat, 02/25/2012 - 19:31 | 2196414 halflink123
halflink123's picture

He would still have a ton of money. WB compounded money at 60% a year as a small fry working for Ben Graham.

Sat, 02/25/2012 - 12:04 | 2195563 Deo vindice
Deo vindice's picture


We know who was dumping the paper silver. Wonder who was on the buy side? Hmmm.

Thanks for the graph. Very illuminating.

Sat, 02/25/2012 - 12:15 | 2195577 francis_sawyer
francis_sawyer's picture

Buffett: "After these purchases, we would have about $1 trillion left over for walking-around money"

Walking around money?

(scroll to bottom)


I guess that's how an idiot like Buffett envisions himself walking around... But shit, at least that ought to be enough to buy yourself a better hoe than Becky Quick...

Sat, 02/25/2012 - 12:19 | 2195585 JohnKozac
JohnKozac's picture



"Lord James of Blackheath, House of Lords February 16 2012
Breaking news Lord James of Blackheath has spoken in the House of Lords holding evidence of three transactions of 5 Trillion each and a transaction of 750,000 metric tonnes of gold and has called for an investigation."



Sat, 02/25/2012 - 12:40 | 2195646 bullnutz
bullnutz's picture

Some time ago Andrew McGuire (the JPM whistle blower) said the Asians are on to the bankster paper manipulation. He had very large buyers that will eventually bust the banksters. Maybe they are making the move and stepped in to stop the raid Doc.  Your thoughts?

Sat, 02/25/2012 - 13:02 | 2195669 bdc63
bdc63's picture

Everybody know it's just a relic ...

I mean "he" ... he's just a relic ...

Sat, 02/25/2012 - 15:11 | 2195973 Dermasolarapate...
Dermasolarapaterraphatrima's picture

I wish ZH had showed the graph of GLD vs BRK. GLD has beaten BRK and for that matter, most all funds, for the past five years. Even the highly paid knuckleheads at Vanguard (VGPMX) did not outperform the Barbaric metal.

The trend is your friend.....

Sat, 02/25/2012 - 11:45 | 2195530 resurger
resurger's picture

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” – Warren Buffett, Chairman and CEO of Berkshire HAthaway

nuff said

Sat, 02/25/2012 - 13:16 | 2195696 Catullus
Catullus's picture

Buffet is full of shit.  He says these things because he knows government prolls want to hear it.

Sat, 02/25/2012 - 11:49 | 2195534 LookingWithAmazement
LookingWithAmazement's picture

Suppose Buffett would openly cherish gold. A run to the yellow metal would arise, making it unaffordable for most of golds fans. So goldbugs, be glad :)

Sat, 02/25/2012 - 11:55 | 2195547 LowProfile
LowProfile's picture

Imagine if he came out and said "I just converted 10% of my holdings to physical".

I would give the system about a month from that point.

Sat, 02/25/2012 - 11:56 | 2195549 Deo vindice
Deo vindice's picture

Never happen. He's part of 'the system'. And he needs the system in order to accumulate his wealth.

PM's are the enemy to such as he is.

Sat, 02/25/2012 - 11:59 | 2195558 resurger
resurger's picture

you dont know his intention, because the old knave is stacking covertly

Sat, 02/25/2012 - 13:30 | 2195727 LookingWithAmazement
LookingWithAmazement's picture

I would give it a second, at best. It starts imploding instantly.

Sat, 02/25/2012 - 19:36 | 2196427 s2man
s2man's picture

/wow. LWA admitting something terrible could happen.  What next, cats sleeping with dogs?

Sat, 02/25/2012 - 11:54 | 2195541 Cursive
Cursive's picture

"we will not be initiating any major derivatives positions." The reason: "We shun contracts of any type that could require the instant posting of collateral. The possibility of some sudden and huge posting requirement – arising from an out-of-the-blue event such as a worldwide financial panic or massive terrorist attack – is inconsistent with our primary objectives of redundant liquidity and unquestioned financial strength."


Reading this affirms my view that a so-called "out-of-the-blue event suchas a worldwide financial panic or massive terrosit attack" is only months away.  Also, if BRK didn't offload the S&P derivatives contracts, then BRK is not positioned to survive the next deflationary leg.

Sat, 02/25/2012 - 12:29 | 2195614 navy62802
navy62802's picture

I'm putting my money on financial panic. Economic decimation.

Sat, 02/25/2012 - 11:52 | 2195543 tobinajwels
tobinajwels's picture

But Don't his class A and B shares sell for alot of money? Wait that's a fiat currency never mind I would rather have Gold! If Gold keeps going higher will HE not join the party? Never mind I think I just answered my own question..ZeroHedge is making me smarter..thank you ZeroHedge for all the work you do!

Sat, 02/25/2012 - 11:58 | 2195552 Cursive
Cursive's picture


Buffett runs businesses that generate huge amounts of cash and BRK doesn't offer a dividend.  Ponzinomics.  And he has hundreds of thousands of glad worshippers.  It will be a big fall.

Sat, 02/25/2012 - 12:02 | 2195560 tobinajwels
tobinajwels's picture

You are right! Thank you.

Sat, 02/25/2012 - 11:54 | 2195545 max2205
max2205's picture


What does HE know?!?

Sat, 02/25/2012 - 11:58 | 2195553 babylon15
babylon15's picture

S&P 500 return since the United States went off the gold standard in 1971: 4700%

Gold return since the United States went off the gold standard in 1971: 4700%


They are equal. 

Sat, 02/25/2012 - 12:06 | 2195564 Deo vindice
Deo vindice's picture

Showing the same numbers does not make two different entities equal.

Sat, 02/25/2012 - 12:23 | 2195592 WestVillageIdiot
WestVillageIdiot's picture

I just pulled up a historical chart of the S&P 500.  It appears to me that the S&P was about 100 when the gold window was so politely slammed shut.  Today it is 1367.  Does your number include dividends? 

Sat, 02/25/2012 - 12:27 | 2195606 nmewn
nmewn's picture

The value of a dollar today is the same as it was in 1971?


Sat, 02/25/2012 - 12:37 | 2195630 WestVillageIdiot
WestVillageIdiot's picture

And what about a 1964 silver dollar compared to one of those Sackajohannamamarama dollars that we now have?  I think their "value" is a little different. 

Sat, 02/25/2012 - 12:47 | 2195650 nmewn
nmewn's picture

lol...just a tad.

Much like a simple quarter of the right mintage, it still buys a gallon of gas with a little left over, just like it always has ;-)

Sat, 02/25/2012 - 12:41 | 2195634 emsolý
emsolý's picture

There is survivorship bias in SPX/SPTR; there is no survivorship bias in gold.

They're not equal.

Sat, 02/25/2012 - 12:50 | 2195652 Cursive
Cursive's picture


Try charting the second derivative for each.  Gold is ascendant since 2000.  That's when the Ponzi started to unravel....

Sat, 02/25/2012 - 12:00 | 2195554 Jim B
Jim B's picture


Buffet, you jerk! 


Pay your taxes! Opps, I meant jerk-off!

Sat, 02/25/2012 - 12:04 | 2195562 Cursive
Cursive's picture

Here is all one needs to know about what is wrong with American capitalism, provided to us by it's biggest icon and buffoon:

Buffett on the annual pilgrimage to Omaha: "If you are a big spender – or aspire to become one...Come by bus; leave by private jet"

The selfishness, the need to define oneself by material things or the aspiration to exalt oneself as some kind of demi-god.  Very sad the lack of self-restraint or personal character.


Sat, 02/25/2012 - 12:14 | 2195575 Deo vindice
Deo vindice's picture

"He who dies with the most toys ... still dies"

Sat, 02/25/2012 - 17:00 | 2196160 King_Julian
King_Julian's picture

"All is vanity"

Ecc 1.2

Sat, 02/25/2012 - 12:06 | 2195565 10044
10044's picture

so the end of the gold 'party' would be when he joins...right?

Sat, 02/25/2012 - 12:12 | 2195572 EmileLargo
EmileLargo's picture

He will be dead by then or too senile to take any decisions.

Sat, 02/25/2012 - 12:08 | 2195567 Savonarola
Savonarola's picture


Sat, 02/25/2012 - 12:31 | 2195618 Cursive
Cursive's picture


I sense a Wagnerian climax of death/fire before the Fourth Turning (for lack of a better term) is brought to a close.

Sat, 02/25/2012 - 20:29 | 2196510 UP Forester
Sat, 02/25/2012 - 12:10 | 2195568 Atomizer
Atomizer's picture

I come from the camp of put up or shut the fuck up Buffett. Grown so tired of hearing Grandpa telling me to pay higher taxes to help the needy. You first Buffett. Get your checkbook out and write the fucking check or go crawl back under the wealth extracting Ponzi System you support.

Sat, 02/25/2012 - 12:38 | 2195636 WestVillageIdiot
WestVillageIdiot's picture

We would all be best off if he just crawled back into Becky Quick's man cave and shut his freaking piehole. 

Sat, 02/25/2012 - 12:11 | 2195570 EmileLargo
EmileLargo's picture

His investment method involves, if possible, holding things forever. If you invest that way, you wuld not buy gold and hold it forever. The real value of gold is in the protection it provides during times of extreme monetary stress. But to buy gold for that reason, one has to be willing to recognise extreme monetary stress. In Buffett's case, does he say anything about the expansion of central bank balance sheets, interest rates, UNFUNDED LIABILITIES etc? No. Ergo, either he thinks these things are irrelevant and the Buffett school of investing holds good regardless of macro-economic conditions or he knows conditions have changed but he is too close to the establishment to admit it and therefore won't say anything about it.

Buying gold is simply a statement that you don't trust the government and that you have no faith in the currency. If you have become bosom buddies with the government, you cannot afford to do that.  

Sat, 02/25/2012 - 12:26 | 2195600 WestVillageIdiot
WestVillageIdiot's picture

Too close to the establishment?  He is the fucking establishment.  He is the John McCain of finance, a total bullshitter disguised as a "maverick". 

Sat, 02/25/2012 - 17:32 | 2196227 I should be working
I should be working's picture

Invest in one company and hold forever?  Please that is just Buffett's mantra now because it's difficult to buy and sell whole companies every day.  He did plenty of trading back in his day, how else could he get 25+% compounding returns that are needed to become the rich douche-bag he is today?

Sat, 02/25/2012 - 12:14 | 2195574 Roni
Roni's picture

totally CRAP WB  ...basically he is like those rich people who rig the system

shame on HIm ...GOLD Has been money ...if it is not just get rid of fort knox right just tell his palls in washington to do it ti sell all gold

Sat, 02/25/2012 - 12:21 | 2195581 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That is one of the worst arguements for not owning gold I have ever read.  First, the halflife for a tulip bulb is shorter than gold ad infinum.  Second, you can grow tulip bulbs.  One can not grow gold.  Then he bases his theory on fear of investing in "what can produce".  Well, who is to say which company can produce?  I could easily pit NEM against XOM and make a case for ownong gold mining shares at par with oil shares.  What if we had compared owning a barrel of oil to a 1/10 Oz coin?  Which is superior in the form of trade?  The gold will have less storage cost, it is easier to move, and its halflife is superior to oil's.

As far as a bandwagon, considering 1% of America's investors own gold, and that only 1% of that 1%'s assets are in gold, I would hardly say there is a bandwagon.  Sentiment is easily against gold in America.  Old people are scared to invest in anything other than CDs or short term USTs and like to keep most of their money in cash.  Middle aged people may consider gold, but most do not understand why to invest in it, and young people do not have the capital to make themselves big investors in much of anything.

Buffet is done, and has been for years.  He would have been the biggest loser in the collapse of the Fiat Ponzi (besides the fascist government and its proxy Banking Houses) if it hadn't been bailed out since '08, thus why he went all in with Goldman Sachs, Wells Fargo, and Bank of America in blood pacts that would make the Bavarian Illuminatti blush.

Buffet is done, and he will continue to lose credibility, money, and his mind.  As housing worsens, as the Fed and all Central Banks inflate, and as gold continues to rise nominally, Buffet and his cohort of paid schills and stooges will wash out in the sea of history as investors who happened to be in the right place at the right time, and nothing more.  He has no ingenuity, he was just lucky.  And lady luck has left the bath tub.

Sat, 02/25/2012 - 12:27 | 2195609 WestVillageIdiot
WestVillageIdiot's picture

I like your anger.

Sat, 02/25/2012 - 12:39 | 2195640 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I'm not going to take it anymore!

Sat, 02/25/2012 - 13:09 | 2195680 Flakmeister
Flakmeister's picture

Are you well Network'ed?? :)

Buffet speaks out of both sides of his mouth...honesty is very hard to come by the higher you climb the economic ladder...

What does his purchase of BNSF tell you?

Sat, 02/25/2012 - 13:39 | 2195740 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Maybe he wishes he was a rail road tycoon and robber baron from the days of old. 

What I do know is that Obama saying "There is no silver bullet to rising oil prices" means the PTB still speak in code.

Sat, 02/25/2012 - 13:57 | 2195800 Flakmeister
Flakmeister's picture

It tells me that he is PO aware... The best way to get rid of fiatcos was to purchase an irreplaceable asset....

Do you think that we could rebuild the BNSF network from scratch now?? I seriously doubt it...

Besides, buying Barrick or Newmont would have been too obvious... :) 

Sat, 02/25/2012 - 12:17 | 2195582 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

‘Stocks for the Trader clever at his skill,

Bonds for the Merchants tipped in the till,

CDS for the Hedge Funds sitting in their hall,

Gold, cold Gold calls the Banker from the hill,

Gold, cold Gold is the Asset of them all.’

Sat, 02/25/2012 - 12:19 | 2195586 holdbuysell
holdbuysell's picture

Warren says on gold: "As “bandwagon” investors join any party,..."

Huh. I never thought of China and central banks as 'bandwagon' investors.

Sat, 02/25/2012 - 12:39 | 2195641 WestVillageIdiot
WestVillageIdiot's picture

I don't know of one friend, or family member, that I have discussed gold with that has bought any. 

Sat, 02/25/2012 - 17:02 | 2196166 malek
malek's picture

Surprisingly I have helped 2 friends to start buying physical, last year!

Sat, 02/25/2012 - 19:45 | 2196448 s2man
s2man's picture

Good for you.  I have gotten mental ascent, but no action from friends and relatives.

Sat, 02/25/2012 - 12:20 | 2195588 Dr. Gonzo
Dr. Gonzo's picture


I'm folksy billionaire and crony capitalist Warren Buffet and I love paper money and stocks more than anyone in the world. Accumulating wealth is my sole reason for existing on this planet and I have no other interests and would not like to discuss anything other than making money. I hope to live to be 110 years old so I can say to all the newly impoverished, unwashed, homeless and confused Americans: "Look at all my money you poor helpless slobs! It's mine! Now continue begging!" I hate gold because it makes me acknowledge how crooked our money system is and how unfree and trapped you all are. A political and tax system that I've exploited to my advantage my entire life while wringing my hands is fake angst. My vanity is so enormous that I like to think I amassed all these billions fairly and you didn't because I'm better but really deep down I know the system is completely rigged against you so I compensate by saying publicly to my best friend and business contact Barack Obama that he should tax millionaires.(I'm a billionaire so we'd figure something out to make me pay a token increase but I'm not really giving any of my money up.) Plus If I were to praise gold as money I would be excommunicated from the Crony Money Powerz who give me such favor and anger them to the extent that they would likely put me in jail for all my illegal insider dealings I've enriched myself with.( I like to pick up every single nickle on the floor you see.) That's why I never talk about the huge pile of physical gold I bought for a song as my insurance against this Ponzi system because when this thing crashes I'm not going to be ruined like those schmucks holding GLD. Daddy didn't raise no fool. Would you like to eat a meal at my Dairy Queen? Everything on the menu is high in fat, sodium, and sugar. A perfect diet for an American. Thanks for loving me and keep looking for me on CNBC to talk about quaint folksy billionaire stuff." 

Sat, 02/25/2012 - 12:21 | 2195590 The Alarmist
The Alarmist's picture

Good thing Buffet has already made most of his fortune. He is a tedious little toad, isn't he?

Sat, 02/25/2012 - 12:23 | 2195591 nmewn
nmewn's picture

Is he still advocating for higher taxes on his secretary?

Sat, 02/25/2012 - 12:27 | 2195604 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is he still being pursued for owing back taxes?

Sat, 02/25/2012 - 12:38 | 2195638 nmewn
nmewn's picture

lol...doubtful...not when you have a couple senators in your back pocket.

One from RI...

and of course our old pal Nelson from his home state...

"That said, the optics aren't kind to the Nebraska Democrat. Earlier in the day, Senate negotiators agreed to remove a provision that Nelson had inserted last week, which would have exempted any existing derivatives contracts from being subjected to new capital requirements. That provision had been pushed by Buffett's Berkshire Hathaway Inc., which has $63 billion in existing derivatives contracts and would have to set aside $8 billion to cover potential losses on those contracts if the legislation were to pass."

Crony fucking douchebags.

Sat, 02/25/2012 - 12:50 | 2195648 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buffett's Berkshire Hathaway Inc. has $63 billion in existing derivatives....

So then he, holding what he said were, "WMDs", is a self proclaimed financial terrorist. 

Sat, 02/25/2012 - 12:55 | 2195660 nmewn
nmewn's picture

Exactly. But he promises (now) never to do it again.

Maybe he's out of matches ;-)

Sat, 02/25/2012 - 13:00 | 2195667 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I don't trust him.  I say we burn his paper house down.

Sat, 02/25/2012 - 13:35 | 2195733 Atomizer
Atomizer's picture

Paging FinCEN, you have an important call.. Please proceed to your nearest white courtesy phone.

Sat, 02/25/2012 - 12:23 | 2195593 noses
noses's picture

In a way he's right. Gold is unproductive; having to use it to protect your wealth is a sign of a seriosly damaged economy. The same is true about "earning" money with derivatives (or buying and selling paper of any kind) – it's not creating anything. But the point is: You cannot even stay on a break even line if you are just going for dividends right now.

And that is why the system is totally broken: Production isn't honored anymore. In a way this is going hand-in-hand with the self-imposed deindustrialization of the USA (you might reread the articles why it was easier to set up mass production of iPhones in China (or even Brazil)).

Sat, 02/25/2012 - 12:25 | 2195598 am
am's picture

The BH letter is always a good read.

Sat, 02/25/2012 - 12:27 | 2195607 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If you like farcical comedy.

Sat, 02/25/2012 - 12:26 | 2195602 AC_Doctor
AC_Doctor's picture

I would continue to bash gold as told to, since I made 154 billion off my CITI warrants thanks to my butt buddy the Teleprompter Clown.

Sat, 02/25/2012 - 12:28 | 2195613 Yardfarmer
Yardfarmer's picture

Bravo! ACD.

Sat, 02/25/2012 - 12:27 | 2195603 The Alarmist
The Alarmist's picture

To paraphrase, Consider the Tulips, how they grow: they neither toil nor spin, yet I tell you, even Solomon in all his glory was not arrayed like one of these. Surely that must be worth something.

Sat, 02/25/2012 - 12:26 | 2195605 Yardfarmer
Yardfarmer's picture

This obtuse and obfuscating octogenarian has been is merely a rigid and lifeless iconic totem of an already bygone age which is already receding into the dim mists of history. His previously "oracular" pronouncements are but echoes now, and such his present ineffectual, irrelevant, and disingenous pronouncements are obviously intended for the diminishing coterie of remoras and other sucker fish clinging to the derelict carcass as it floats on into the darkening waters of oblivion. 

Sat, 02/25/2012 - 12:39 | 2195642 Cursive
Cursive's picture


I've always thought Jack Nicholson's character in "About Schmidt" was loosely based on Warren Buffett.  Of course, the character was not as successful as Buffett, but that makes it all the easier to see his life for what it is - a sad life of a careerist tightwad with no personal life or relationships.

Sat, 02/25/2012 - 19:52 | 2196461 s2man
s2man's picture

Damn good writing there, YF. How on earth did you get junked?

Sat, 02/25/2012 - 12:29 | 2195616 CapitalistRock
CapitalistRock's picture

Warren has always invested in monopolies. Today he is very cozy with the federal government. It is impossible to voice support for gold while accepting the monopoly power of government. So he made a choice. It was either take a position in gold or take an economic advantage that only government can offer. I'd have done the same.

Gold is the anti-monopoly. If you have read the only authorized biography of Buffet (Buffet: The Making of an American Capitalist) you'd have seen this coming decades ago. He only invests where he has the potential to keep the competition out. That's impossible with gold.

You also have to realize he is an investor. My first need is to store wealth for the future. My second priority is investing. Warren is wired the other way around.

Sat, 02/25/2012 - 13:42 | 2195750 Rogier
Rogier's picture

So Coca Cola and IMB are monopolies now? That's news to me.

Sat, 02/25/2012 - 12:32 | 2195622 Seasmoke
Seasmoke's picture

What is that floating in Buffets bath tub ?

Sat, 02/25/2012 - 12:33 | 2195623 alien-IQ
alien-IQ's picture

Just when you thought it was impossible for Germany to give Greece more reason to hate them...

German tax collectors volunteer for duty in Greece

(Reuters) - More than 160 German tax collectors have volunteered for possible assignments in Greece to help the struggling Mediterranean country gather tax more efficiently, the Finance Ministry in Berlin said on Saturday.


The offer risks fuelling resentment among Greeks who have already reacted angrily to earlier German calls for the appointment of a "budget commissioner" to monitor the Greek government's management of its finances.


What can possibly go wrong with this plan?

Sat, 02/25/2012 - 12:38 | 2195635 EmileLargo
EmileLargo's picture

I hope those guys have decent life and health insurance. :)

Are the Germans the most insane nation on earth? This is bordering on crackpottery.

Sat, 02/25/2012 - 12:40 | 2195644 alien-IQ
alien-IQ's picture

I think the odds of at least one of those "volunteer tax collectors" being killed are very very very good.

Sat, 02/25/2012 - 13:31 | 2195729 css1971
Sat, 02/25/2012 - 12:33 | 2195624 Yen Cross
Yen Cross's picture

Buffett knows his days are numbered. He has run full circle, from capitalist to evangelist. You can't buy a seat in heaven Warren!

This guy is losing his marbles, " BIG TIME"!

Sat, 02/25/2012 - 12:33 | 2195625 Roni
Roni's picture

when the world gets rid of the dollors that time these trillions would vanish ....JACK ASS BUFFETT  suck it up

Sat, 02/25/2012 - 12:34 | 2195626 EmileLargo
EmileLargo's picture

If Buffett was praising gold, I would sell it shortly afterwards. The whole damn world would pile into it. That would be a sell signal. 

Sat, 02/25/2012 - 12:34 | 2195628 WestVillageIdiot
WestVillageIdiot's picture

That monkey-boy Cramer was calling a bottom in housing long before 2009.  I still remember the last time I let that piece of shit show "Sad Money" cross my TV set was in 2007.  He was telling everybody that they should buy a house now.  The market was completely fixed.  I nearly threw up.  I have never allowed that show on our TV set again.  In fact, CNBC is not allowed on our set.

What is even funnier is that monkey-boy, and the rest of the CNBC whores, are based out of New Jersey.  There was still plenty of housing optimism in New Jersey in 2007.  It was holding up pretty well.  But it was already going down by 2008 and the past 18 months have been a complete bloodbath.  I have witnessed that firsthand.  The Garden State has been crushed.  He he.  Sorry, I had to laugh. 

I just can't believe that the people handing out all of the bad housing advice 5 years ago are still welcomed by any friends or family.  All the advice I was getting was so confidently offered and so completely wrong. 

Anybody that listens to Cramer deserves what they get.  The past 5 years have pushed the balance in my sympathy account into negative territory.

Sat, 02/25/2012 - 12:38 | 2195637 Silberadler
Silberadler's picture

Since I found the Kügers in my parent's estate, after I held my first double eagle in my hands, after I touched my first Gold Franc Vreneli and the first Sovereign - I knew : this is real money.

This is value. As an engineer I know about the metal's properties. They are unique.

Looking at the history of the Roman Empire, followed by an 800 year period of Byzanz using the Solidus and having a look at China's millenium long use of metal based currency - only ending in 1935 - I have turned a believer.

Not by propaganda but by insight.

If I'm wrong - well , I loose - but not 100%. maybe 50% 70% but not 100%.

I need a store of my humble wealth, a hedge against insanity.

I know the history of my grandparents through WWI and WWII, the history of my parents through WWII reflected in the 20 RM gold coin - which still buys me food when I need it.

Gold is not for the greedy.

Let's see who is right - time will show.


Sat, 02/25/2012 - 12:40 | 2195643 Yen Cross
Yen Cross's picture

You forgot Maple Leafs! What gives?

Sat, 02/25/2012 - 14:13 | 2195864 Prometheus418
Prometheus418's picture

I forget Maple Leafs as well.  It's a matter of personal preference- every time I see a British, Canadian or Austrialian coin, I consider buying some because I like the design.  But then I look at the obverse, and that same old hag is on all of them.

As far as we've fallen, I am, and remain, an American- and will not hold money stamped with the image of royalty.  I'll stick with Eagles and Philharmonics, thank you.

Sat, 02/25/2012 - 14:49 | 2195935 Yen Cross
Yen Cross's picture

LMAO! Nice post! just one question, if I may?  Do " Koala Bears" really look like old " HAGS"?

Sat, 02/25/2012 - 20:10 | 2196499 s2man
s2man's picture

I just want something which can be recognized by the U.S. plebes, so I stick with 90% silver U.S. coins. 

If I win the lottery I will buy gold, in whatever form, to carry me through to a time when it can be assayed and converted to other assets.  Until then, foreign coins are off my list.

Sat, 02/25/2012 - 12:53 | 2195657 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Measure your wealth in ounces and not nominal price and you lose nothing.

Sat, 02/25/2012 - 13:40 | 2195747 gnomon
gnomon's picture

The only way that you are "wrong" is if the all-encompassing Death Star ever comes into being, sucking all of the oxygen and life, (and Liberty), out of the planet, making "paper" King, black into white, ponzi into "paradise" at the point of a loaded gun.

Sat, 02/25/2012 - 12:45 | 2195647 HD
HD's picture

Damn. I was hoping this years letter would be read by Warren himself in a youtube video from the bathtub.

Just like Mr. Buffet, I too make major financial decisions while I'm naked and wet. As a result, I'm unfortunately no longer allowed at any of the TD Ameritrade branch locations.

Sat, 02/25/2012 - 12:53 | 2195654 lunaticfringe
lunaticfringe's picture

I vaguely remember someone by this name. He was a guy who desperately tried to cling to relevancy- his ego demanded what his billions could not deliver. A continual massage from the press and the hoi polloi.

Fuck you Warren. You helped create this mess. Now go home and write that big check to the USG and STFU.

Sat, 02/25/2012 - 12:56 | 2195658 NuYawkFrankie
NuYawkFrankie's picture

Re. Buffet will avoid derivatives going forward.

That's very thoughful of you Mr Buffet... given that there are now enough derivatives out there (due in no small part to your Wall St 'Investments") to blow up the world several times over.

Sat, 02/25/2012 - 12:56 | 2195662 michael_engineer
michael_engineer's picture

Reasons housing won't be coming back :


Observations from an engineer | ZeroHedge

Sat, 02/25/2012 - 13:15 | 2195694 michael_engineer
michael_engineer's picture

Regarding gold and fiat, they are not basic necessities.   Most people have little real need for either in their day to day activities.  Gold is used in the electronics industry so there is some intrinsic value there.  But if there is a global slowdown as some think will occur, then even the electronics industry might end up with a demand for less gold for lower levels of production.   And in a slowdown, jewelry demand is likely to drop too as the basic necessities will get priority over luxury.

Sat, 02/25/2012 - 13:26 | 2195718 WestVillageIdiot
WestVillageIdiot's picture

And any global slowdown will be followed by them printing like raped apes.  I think they have proven that they have no fear of over printing.  How does that tie into your views?

Sat, 02/25/2012 - 14:45 | 2195926 michael_engineer
michael_engineer's picture

Personally, I suspect that China and other holders of TBills have indicated that more printing might cause a selloff in TBills as the value of large volumes of existing TBills might be driven lower by more printing.  Why not sell a bunch of them if their store of value is getting compromised?  I think that is what keeps QE3 from happening.  

Sat, 02/25/2012 - 13:05 | 2195672 Atomizer
Atomizer's picture



Pick A Bale Of Cotton


What is globalization? 

Globalization is nothing more than the constant search for cheap labour and the constant upgrading of infrastructure all across the earth. Thus improving the infrastructure of previously 'unindustrialized countries' and accessing a whole new ununionized labour pool. The new world's that are created and improved through road, rail, energy, and hospital projects that are built by huge multinational corporations and paid for by unwitting outside investors. Before all the public works' projects are completed there is a debasement to pay for the projects with outside investors' money because it was 'lost' during the stock market crash or crash of a company's stock (debasement of vehicle of monetary exchange).


During the debasement period the "inside" investors are selling short, 401k's/entitlements etc. are frozen until the company pays out whatever debts it can with whatever liquid it has left., then the company goes bankrupt, it's assets are filtered off to a subsidiary/holding co that was formed prior to debasement, the projects they were building get snapped up at fire sale prices. Now the projects are paid for, the companies get their money and the country gets its infrastructure for their people to work jobs cheaper than other people in the Old World will work them


Along the globalization trail, TPTB monopolize all the resources they can under corrupt regimes that most of the time they put into power. Then take control of all essential parts of the economy; food supply, energy and mineral resources, fresh water sources, precious stones, cash crops, telecom, and healthcare. The foreign multinational corporations use cheap labour to assemble their goods while owning all other utilities the people of the country use. Once the cheap labour and resources are exploited, the globalists pick up and start the search for a new land to build up. Every new world is built on the dollar of outside investors and tax payers. Outsourcing is the only way the king can afford the peasants wages.


It started with canals, ships, and marinas in olden days and evolved into railroads, locomotives, then into trucks and roads, and most recently aviation. Every logistic means throughout history has been payed for by the outside investor through the use of debasements. Bubbles are built up on the word that 'the good times will never end' and popped on 'we never saw this coming' - all made possible by governments pretending to fail all across the world. All three tiers of government (soon to be four; federal, state, municipal, and soon, Union) are chalked full of failures.


The same groups of companies get the contracts for foreign nation building, usually spawned off each other, tracing their way back to a group of banks that operate throughout the world. These companies debase vehicles of monetary exchange (stocks and stock markets). Most of them having intimate ties with the World Bank. The financiers' of globalization stay the same. Once projects are completed and economies successfully debased, wars are waged to pay for economic recovery and fulfill whatever geopolitical agenda these global financiers have. After the era of fraud there is a period of boom and the cycle repeats itself, the size of the war usually depends on the size of the debasement that preceded it.


Once the Vehicle of Monetary Exchange is debased, the stolen money is laundered through various organizations. Once the money has been laundered there needs to be a war to destroy the paper trail (the fog of war) so they need an event to set off the war. If multiple countries' economies are down, it will be a global war (each country fighting with its favourite enemy). At this time the financial sector will air its laundry, and we'll start hearing about frauds and accounting errors. This will lead to federal bodies (FINRA, SEC) bringing cases against the scapegoats (Skilling, Conrad Black) and we will have shown trials with show judges (Crater, Landis). The trials will bring justice to the 'rogue conspirators and that's that.


The new bubbles are usually being built up as the current bubble is popping. These bubbles are allowed to happen through manipulation of laws. In America, the crash (era's of fraud) usually coincides with the end of one presidency and the start of another and occur every 4 years. In the lame duck sessions of a presidency, all previous corporate criminals get pardons. This timeline repeats itself throughout history. 

Sovereignty and globalization

Sat, 02/25/2012 - 13:07 | 2195674 RobotTrader
RobotTrader's picture

Markets might have put in a short term top on Friday.

Gasoline has gone completely parabolic and is due for a correction.

There is one small catch.

The dollar took out the prior lows and the Yen continues to crash.

If these currencies keep imploding, then we might be in a "Weimar Run" and stocks could keep running higher.



Sat, 02/25/2012 - 20:25 | 2196535 s2man
s2man's picture

What? No bashing? No junks? Are you okay, RT?

You've actually admitted equities and commodities are rising due to currency debasement. You've alluded to the DOW 50k/gold 50k syndrome. +1 for rationality.

Personally, I would still stay away from equities as the market is fickel and could change its mind.  Commodities?  Folks gotta have them...

Sat, 02/25/2012 - 13:06 | 2195675 lunaticfringe
Sat, 02/25/2012 - 13:12 | 2195685 jack stephan
jack stephan's picture

Cross between Eddie mush and frankie coffeecake.

Sonny: No-no-no. Coffeecake, no good. I don't want that face lookin' at his face when he's rollin' my dice. Jimmy! Grab a towel from the bar!

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