After repeating his regular argument that gold is an unproductive asset that will be outperformed by stocks, or even farmland, over the long run, [Warren] Buffett does acknowledge that gold fans are "right" to be afraid of paper money.They have a "correct basic premise" that paper money will be worth less in coming years.This is truly a bizarre screed by Buffett. Owning gold as part of cash reserves does make a lot of sense if people should be afraid of paper money.
As I have pointed out before, gold is an alternative to cash and not necessarily an "investment" alternative, although, as the paper money crisis intensifies, the purchasing power of gold is likely to climb.
Buffett then got even more crazed. CNBC again:
He disagrees with them on the strategy of buying gold to avoid that decline in value. "Where they run from that, and they should run from it, is, in my view, where they make their mistake."This simply makes no sense, if the dollar is going to collapse, gold is the place to be. Buffett went on, according to CNBC:
Buffett also notes that many gold buyers are emotional about the metal, and want other people to agree with them since more buying boosts its price.
"They want everybody to be so scared they run to a cave with gold. Caves might be a better investment than gold. At least they're not producing new caves all the time."Gold buyers emotional? To buy gold is the most rational thing to do if you understand how central banks destroy paper money overtime.
As for his caves comment, it tells you a lot about elitist Buffett. He is one nasty dude. He admits gold will perform well against paper currencies yet disses those who buy gold.
And as for those running into caves, you can bet with comfort that Buffett and his anti-gold sidekick, Charlie Munger, both have billionaire caves, that is if Buffett isn't cleared for entry, by his buddy Obama, into the governments nuclear proof cave in Omaha.
Rumors are already circulating that on 9-11, when then-President George Bush was taken to the underground base in Omaha, he ran into Buffett there.