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overtheedge
Membre depuis mai 2012
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Warren Buffett vs. Hommel on Gold

- Jason Hommel - Silverstockreport

"Since the year 2000, BRK.B has gone from $40 to $114, an increase of 2.85 times.

Since the year 2000, Gold has gone from $255 to $1314, an increase of 5.1 times."

Now if we suggest that inflation has been running 6% since year 2000, BRK.B only increased in valuation by 42.5% while gold increased 255%.

But with all respect for WB, he is still the official shill for Berkshire Hathaway and his wealth is dependent on its valuation. Even worse, his wealth is completely dependent upon the US government and Fed playing fiscal superman and defending the USD fortress of silly-tude. If the USD vanished today, the purchasing power of gold would rise by at least 2.5X. And if more major currencies of the day collapsed, gold would be withdrawn from the market in mass. Demand would increase. Ergo ...

Infinite demand (for all practical purposes) = virtually no supply at an affordable price. Of course the bigger question is, "With currencies of the day worthless, what medium of exchange would be used to purchase gold anyway?" Hint: You can't eat gold.
Except for small hand-mining operations, new supplies wouldn't become available.

So coming back to Warren Buffet's claims, farm land only has potential value. Without the farmer, plentiful supplies of fuel and an operational agricultural support system, the farm land is essentially worthless. Small family farms might survive dependent upon security issues. And the mighty WB would be attempting to trade shares of Berkshire Hathaway for potatoes, beets and cabbages. I say again, "attempting to trade"! No operative currency of the day, no return on BRK. By the mighty WB's own words, no ROI=no valid reason to buy or hold.

Believe what you will. Do as you will. Choose wisely. There is every probability that you and yours will be stuck with your choice only too soon and most probably for the rest of your lives.

I look upon choices from the prospective of, "What if I am wrong? What would be the outcome then?" Inflation, under our current monetary system, can never go away. "Never." Admittedly, conservative choices tend not to be the most profitable options. But a fast nickel is still a 5 cent profit.

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Début de l'article :Warren Buffet explained why he does not see the value in gold in his annual report from 2011. Here I go.Buffett:The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that som... Lire la suite

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