Last week we saw that the American public thought gold was the safest investment.
Now we see three of the richest guys in the world essentially say that gold is garbage.
Warren Buffet says he doesn't invest in gold, only in "productive businesses."
Charlie Munger--Buffet's long-time partner--says, "civilized people don't invest in gold."
And Bill Gates says this:
| "...you know, hey, there's an asset that's not doing anything for the citizens and then you— you know, because it's purely psychological it's not like people would say, `Oh, well, when it gets to $800 an ounce people will buy four times as much jewelry.' There's no— nothing that steps in as a buyer at any price. It's just purely `Oh, other people think it's— other people in the future will think it's worth more than it's worth today,' which, you know, if you think the world is scary and people are going to panic, I'm not saying that theory doesn't exist, but there is no floor if ever people got a view." |
So, which is the smart money? The three super rich guys or the public? Hint: in 2006 the public went crazy for single family homes.
I totally agree with Buffet, Gates and Munger. Hands down.
8 comments:
IMO I'm doing a social work shorting gold and silver.
Hoarding of money should be dis encouraged (which is what goldbugs promote, I'm not suggesting that gold and silver is money), and gambling on asset prices too. I think depriving these propagandist of their wealth by deflating these asset prices their financial ability to carry propaganda wars is reduced and hence good for everyone else.
Also transfers real money to someone who actually may invest or spend it into the economy.
Fighting the good fight!
If and when humanity advances, the value of certain commodities such as gold will be zero.
So, I was looking you up online and it seems you might have been bullish on gold for about 15 minutes 10 years ago before bashing it, and missing a 600%+ move. Must be a bitter pill.
btw - in 2006 the public was crazy about single family homes, but guess who was too? Hint: you.
Smart thinkers will ask themselves why Bill Gates, Warren Buffet, Ben Bernanke et al go out of their way to trash gold.
The truth is that if everyone converted their dollars into gold the US economy would crash. But there is a paradox here, because the smart option for you as an INDIVIDUAL is to buy gold, and protect your savings. They don't tell you that part.
Yeah, but it all depends on when you buy gold. The people bought heavily around the previous top, and that turn out really well for them, didn't it.
The problem is that gold is not an asset in that it produces no return and has little actual value other than price, so it is difficult to determine what it is worth as a vehicle for saving or an inflation hedge at any particular point in time.
That means it is not only high risk but also costly since bullion and coin pays no return and there is also storage expense. In addition, one pays a premium of coin.
PM's are part of a portfolio mix in varying proportions based on changing conditions, but a savings vehicle for most people, NOT.
I recommended going to gold after Bear, not as an inflation hedge but as a safe haven in the global financial meltdown I saw a great likelihood of occurring. Moving to a high % of gold and other hard assets then was a prudent strategy that turned out to be correct, too.
Hahaha, now that Warren Buffet has bought 10 million ounces of silver, back when it was under $5, he says that "gold is garbage". I suppose he thinks his silver is garbage too then? So why isn't he selling it yet?
Gold is not an investment. It is currency. It is a much safer alternative to the dollar. I would much rather be investing in productive businesses than gold, but the truth is that our global economy is not a safe place to put your wealth right now. We are all susceptible to the whims of central planners. This is not the type of environment for long term investors. So rather than take on unwanted risk via the market, and rather than realizing a negative real return on bonds, and rather than subject myself to currency debasement and dilution, I prefer to stay liquid in a currency that cannot be conjured out of thin air - gold.
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