131–140 of 208 posts
Earlier quoted context omitted.
Imagine if the USD were a company. Friend: "Hey man, you gotta get in on this— this stock has gone down 30% in the last year! Nowhere to go but down!"
Currency is a terrible way to invest. Nobody is arguing that.
Warren Buffet is a value investor. He buys stocks that he sees as fundamentally undervalued during a bear market and sells them when they are overpriced later. If you try to value gold objectively (its industrial and possibly jewelry use), its price should be significantly lower than what it is today. Speculation and paranoia have driven its price to amazing heights. A value investor can't touch gold with a 10 foot p…
Gold is priced in dollars. If the dollar loses real value, gold goes up. It's the same reason oil is $100, its baseline price is getting set ever higher, because it's priced in dollars. Price oil in silver or gold and you'll see that oil hasn't gone up in price, the dollar has gone down. It's not paranoia or speculation primarily driving the price increase, but the objective destruction of value represented in what a…
That's why the average US wage and minimum wage has also tripled over the same time period, right? Or have we become less efficient and our hour of labour is "worth" a third less?
The price of labor eclipses the price of commodities in most of the economy, which is the true value of your dollar.
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I think he was talking about a small amount of gold. Twenty-thousand dollars worth could fit in your hand and easily be smuggled in clothes, luggage, etc. That's pretty handy if you had the flee the country from nazis(or whatever) that have stolen all of your other assets. Admittedly that's a pretty unlikely scenario.
It's even more unlikely because you then have to find a buyer that's willing to pay market price for the gold wherever you end up at. You'll be reduced to selling it for whatever people are willing to pay.
I don't think that Buffett is saying that stocks, at any given point in time, will deliver you better returns over a given time period than gold or bonds. He quite clearly notes that there are times when bonds are beaten up and they'll offer a great return. Buffett, being a virtuoso, variously reaps returns from derivative contracts, insuring sweepstakes prizes, and solar farms. He once bought a boatload of silver an…
As the money supply increases, all currency is devalued and everything that's denominated purely in currency loses value as well. This is a gross oversimplification. The monetary supply can increase without inflationary effects as long as there is a corresponding increase in the production of value in an economy.
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Have you considered that the chart merely shows the value of gold in US dollars, and that it could be, this time, that the US dollar is the speculative bubble that has been bursting for some time now.
It has two lines, one is for prices adjusted for inflation (the blue line), the other (the yellow line) is with absolute prices.
He omits the only valid reason any non-speculator would own gold - it holds it's value through times of political turmoil - holds it's value over millenia rather than decades or centuries. A coup d'etat may result in seizure of private companies, rendering your stock worthless, but not touching the value of gold. It would be speculating to put all your assets into gold, but a small amount is like an insurance policy.…
In any serious failure of government, the value of bullets far outweighs the value of gold.
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.... only to devalue the dollar by 50% or so as soon as it was believed there was not a lot of gold left in private hands. While "stealing the gold" is not technically correct, eliminating 50% of the value of everyone's saving IS, and the confiscation of gold was done to eliminate the best (and popular) store of value. Of course, it was all legal -- but when the government makes the laws, that statement is completely…
"he confiscation of gold was done to eliminate the best (and popular) store of value." 'Best' no, 'popular' yes and that was crippling the economy.
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> stole all of America's privately held gold Except for the bit where he, y'know, paid for it at the then-prevailing rate. (Which was defined by law, since at that point the US dollar was still on the gold standard.)
If someone raped you and then paid you the then-prevailing rate for a whore, does that make it not rape? What makes an exchange stealing is the involuntary aspect.
Stunning circular logic there.
"Someone" =/= "democratically elected government with clearly enumerated power".
We agreed on the Constitution and it says the government can take stuff as long as it pays you. Those are rules we agreed to.
If we all agreed on a Constitution that said the President could have relations with whoever he wanted and then people chose to stay in this country and then the President chose to have relations with them we might question whether that still qualifies as rape.
Warren Buffet is a value investor. He buys stocks that he sees as fundamentally undervalued during a bear market and sells them when they are overpriced later. If you try to value gold objectively (its industrial and possibly jewelry use), its price should be significantly lower than what it is today. Speculation and paranoia have driven its price to amazing heights. A value investor can't touch gold with a 10 foot p…
Gold is priced in dollars. If the dollar loses real value, gold goes up. It's the same reason oil is $100, its baseline price is getting set ever higher, because it's priced in dollars. Price oil in silver or gold and you'll see that oil hasn't gone up in price, the dollar has gone down. It's not paranoia or speculation primarily driving the price increase, but the objective destruction of value represented in what a…
http://inflationdata.com/inflation/inflation_rate/historical...
> It's not paranoia or speculation primarily driving the price increase
the price of oil is driven by supply and demand. the useful of oil has gone up, but the amount of oil we extract has not kept up. that's why the price has moved.
Earlier quoted context omitted.
Gold is priced in dollars. If the dollar loses real value, gold goes up. It's the same reason oil is $100, its baseline price is getting set ever higher, because it's priced in dollars. Price oil in silver or gold and you'll see that oil hasn't gone up in price, the dollar has gone down. It's not paranoia or speculation primarily driving the price increase, but the objective destruction of value represented in what a…
Right, because the price of gold in US$ has tripled in the last five years not because of speculation but because the dollar is one third as valuable as before. That's why the average US wage and minimum wage has also tripled over the same time period, right? Or have we become less efficient and our hour of labour is "worth" a third less? The price of labor eclipses the price of commodities in most of the economy, wh…
I dare you to spec out the price of a basket of 10 to 15 commodities from a decade ago compared to where they're at now.