Let’s talk about Gold as an investment.
Gold is one of the most divisive asset classes on the planet. Stock-centric investors such as Warren Buffett think it’s a worthless “pet rock” that fails to appreciate in value. Gold bugs, on the other hand, revere the precious metal with an almost religious-like ferocity.
Both of these views are misguided particularly when you apply them to a framework that involves TIME.
The fact that Buffett accrued his great fortune during a brief period in which the financial system was based solely on fiat currency has lead him to view Gold with contempt. However, the fact remains that Gold has been a storehouse of value for 5,000 years.
Based on this alone, Buffett’s ideology is myopic. To sneer at Gold is to sneer at the history of money.
However, Gold Bugs are no better in that they focus too much on this “5,000 year metric.” The fact remains that since 1971, Gold has ceased to operate as a storehouse of value in the same way as it did during the other 4,962 years.
I’m NOT saying Gold is no longer a storehouse of value… I’m saying that Gold no longer stores value as it did PRIOR to 1971.
The reason for this concerns the fact that the world is now in a completely fiat-based financial system in which Central Banks can print tens of billions of their currencies at a whim. This opens the door to abject manipulation of Gold prices.
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It is rare
ReplyDeleteIt cannot be created
All that ever was, still exists
It is the #1 transmitter of electricity
It is beautiful
All Eastern Nations still value it
It is indestructible
ReplyDeleteBuffett is correct in a way, When the fiat currency becomes worthless and there is nothing of value to trade in whatever market, gold will just as worthless as the fiat currency.
ReplyDeleteIn other words, you won't be able to buy a loaf of bread with gold if no one has any loafs of bread sell.
SBJ
Hint:
ReplyDeleteThe elites don’t want us to have gold.
Get rid of it.
Sell it cheap.
Right.
I will keep mine, thank you
SBJ
ReplyDeleteNo, Mr Buffet is not st all correct.
Furthermore, I suggest to you that Mr Zbuffet has a horde of gold coins safely stashed away.
Mr Buffet is a tool of the Rothschild Family and says exactly what he is told to say.
Wake up.
Gold is nature’s most precious element
This has been known for 5,000 years
Why do you think you are smarter than all of humanity?
It is indestructible, beautiful, and the best transmitter of electricity. (Silver is second)
It is not poisonous and kills all one cell organisms on contact (ditto for silver).
Educate yourself!
Anonymous May 15, 2018 at 5:26 PM
ReplyDeleteI said he was kind of correct.
Bla, Bla, Bla and Bla, that gold still won't buy you a loaf if no one has any loafs of bread sell.
SBJ