‘Civilized People Don’t Buy Gold’ says Buffet Henchman: Of course not. If “civilized people” started buying gold then there might not be enough of it left when Darth Buffet decides he needs to scarf it all up. And unlike the monopoly money his pal Ben Bernanke crashes out savings with gold can’t be created via fiat.
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Buffett just needs to pay his damn taxes and STFU. No doubt this henchman was sent out to bash those that own precious medals and or are looking at them.
Wait. Didn't Soros buy a bunch of gold?
Well, I guess even a broken clock is right twice a day.
Translation: Don't prepare for any possible dollar collapse--especially if Obama is [God, help us] re-elected. This is the same Obama gerbil who insists all wealthy folks [which will eventually be anyone with a job] pay more taxes, while he is millions in arrears. Yep, I'd take investment advice from Warren B. Madoff.
Buffet should be put in the stocks until he's more civil
Your above sentiments are true only within the context of a society and economy which is relatively advanced. If the oatmeal hits the fan sometime soon, how much gold will you be offering me for a case of beef stew or a few hundred rounds of 9mm?
I challenge the common wisdom that gold -or any precious metal- has 'intrinsic' value. It only has the value different people place on it. As noted, a can of Dinty Moore's has far more 'intrinsic' value.
Although the phrasing was rather ignorant, I understand the point he is making too - yes, a thriving business is ultimately more valuable than any static investment, unless maybe you have gold by the barrel.
"Your above sentiments are true only within the context of a society and economy which is relatively advanced"
I agree that there must be an advanced system or market before precious metals became valued as currency. But I think that society or system need only be as advanced as humanity has been capable of for many many thousands of years. This is well evidenced by a history of how long gold has been as money.
Of course you are correct that at the apocalypse the particular value of this item will diminish significantly. Perhaps it will be even less valuable than the paper that can at the very least be burned for fuel. However when order returns (as it invariably will unless the species perishes completely) so will the necessity of the precious metals as currency. The dinty moore maintains little value as money because once consumed it has no further function. The bullet might have more but the person willing to part with them will likely soon be returning whatever it is they got in the exchange by the party that will soon be pointing that bullet back at them.
This is when the value of gold becomes most apparent. It doesn't need a particular government or society to gaurantee it's worth. Just two people that value it. One slightly less than the other. In this way gold manages to ensure that market transactions are private affairs. With no need of a 3rd party. It is true that many things can fill this position. Gold is ideal, however, because it is not perishable and will likely not be consumed but rather owned. And even if any particular individual does not care for it all that much he will hold onto it because he knows that plenty out there will.
"I challenge the common wisdom that gold -or any precious metal- has ‘intrinsic’ value. It only has the value different people place on it."
That is precisely why the value is considered to be intrinsic. Because mankind -nearly universally and almost as if part of some collective unconsciousness- has valued it so highly. Not the least of which is because it has little other value than to be valued. Because of this reason it remains unconsumed and in a trade-able form or a form that can be returned to trade-able with just a little fire. This is a lesson the British learned bitterly when they traded so much of their silver to the Chinese for tea. They quickly ran out of the tea . . . and the Chinese kept hold of their silver. The transfer of wealth was fantastic. And because the Chinese had no desire for European products it was not reciprocated.
"a thriving business is ultimately more valuable than any static investment, unless maybe you have gold by the barrel."
This is an interesting point. After some thought I am inclined to suggest that there are no thriving businesses without a sound money policy. Rather instead we have entitled entities propped up by fake money, debt, government help and the sacrifice of the taxpayer.
Sometime ago government gave itself the authority (or rather their private bank) to create money arbitrarily. This, along with a myriad of other regulations enacted, has led to the sort of system where we have a new class of businesses. The Robber Baron Government Complex. They control production and consumption by regulating competition out of business and then price fixing based on their own ability to control supply. And when there model fails they demand support from the taxpayers and the creation of more money to bail themselves out. Money which, given the nature of currency outpacing the existence of actual wealth, diminishes the worth of all the other money in existence.
The purchasing of gold protects one from the inflation. It rises as the value of the dollar drops. And if the opposite happens and the dollar rises while the gold drops then no actual value is lost because those fewer dollars you can have for the gold are stronger than the ones you bought the gold for. Gold is amber for wealth. It locks value.
This is perhaps not why Buffet and his Baron Butt Boys fear gold. More likely they fear a return to the gold standard because when there is a discrete money supply (or at least progresses at a rate tied to actual effort expended in advancing size) the people will have a greater control over the economy. Those with the wealth in times of trouble will hold onto it. For those buying their products this means a drop in purchase but an increase in savings (contrary to popular beliefs it isn't the capitalists that say "buy, buy, buy" it is the keynesians and their cheap money) while those lending money will affix high interest rates. All this has the effect of forcing companies Buffet has an interest in to provide a better product for cheaper or to get choked out by the invisible hand of the market that is acting on behalf of the consumers that have taken back the power of sound money that can't be debased and manipulated by Obama, Buffet and co.
AH, it sure is nice to see a long post that doesn't make my head hurt and stomach churn! It's even intelligent!
Thank you PJ49! PD brought up some very interesting points I was really glad for the opportunity to think on them for a while.
I would only advise someone to buy gold after they have their bases covered.
"Gold is money. Everything else is credit." J.P. Morgan
http://www.wikinvest.com/wiki/Gold_standard
Well, call me uncivilized.
You can call me a barbarian who likes his barbarous relic.
You can put me in that column as well.
1 word: Bernanke
2 words: Jackson Hole
3 words: sovereign funds buying
4 words: race to the bottom
5 words: China is buying it all
6 words: Europe is unwinding dragging everyone down
7 words: No yield and inflation makes gold attractive
8 words: risk is driving everyone out of fiat currency
9 words: gold and silver are the only play in town.
Money swore an oath that nobody who did not love it should ever have it. -Irish Proverb
Well done sir. Well done.