It must be "Bash Gold" week on the CNBS network. Warren Buffet has been leading the charge by talking down the precious metal in a recent newsletter to Berkshire Hathaway shareholders and followed up Monday on CNBC's "Squawk Box" where he warned that despite the declining value of the dollar, running to gold is a "mistake."
Not to be outdone, Buffet’s partner in crime Charlie Munger recently declared "gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939 but civilized people don't buy gold – they invest in productive businesses."
And now, Bill Gates went on CNBS Monday to try and explain the great error in investing in the barbarous relic. It's like they're trotting out the billionaire boys club to scare people back into Berkshire and Microsoft stock.
As they should. Bill's Microsoft has been absolutely decimated vis-a-vis gold for 12 years straight and running.
Both Buffet and Gates concede that paper money will continue to be debased as long as central banks hold the legal monopoly to print it. What they won't mention is that such blatant fraud is conducted to finance government deficits and prop up a virtually zombified banking sector.
Gates in particular tries to tie his bumbling rant together by declaring gold has a kind of psychological value to it. That those who buy it are motivated by it because “people in the future will think it’s worth more than it’s worth today.” Gates goes on to point out that as more people flood to the gold market, the more the gold mining sector will develop which will subsequently increase the supply and put downward pressure on prices.
Congratulations Bill, you have stumbled onto some of the most basic lessons of economics.
First, since the value of all goods and services are determined solely by the purely subjective perceptions of utility amongst market participants, gold is no different from any other investment. Many perceive it is a viable currency alternative to the current state of affairs. Those who put their money in equities do so because they believe it will yield them a return. “Psychological” factors play just as much of a part in this thinking as they do in those who purchase precious metals.
Second, if an investor’s marginal profit is exceedingly high, this is a signal to other market participants that there is money to be made in whatever sector in paying out at such a rate. People move to where they can make a profit. They don’t sit idly by making negligible returns. Supplies increase, prices adjust, and so does the market.
None of that diminishes the purpose of gold which not only acts as an investment but a hedge against the profligacy of governments. The pressure on central banks to flood the world with liquidity is enormous. The practice of fractional reserve banking has left much of the world’s major financial institutions insolvent. Central bankers know of no other solution from their Keynesian instruction guide than “print, print, and print some more.”
If Gates really wants to speak to psychological factors, why not say a word on why inflationary monetary policies are employed to begin with? Indeed, if money printing actually created just one iota of wealth, then Emperor Diocletian (whom Paul Krugman looks to for policy advice) would have led Rome into a period of material abundance rather than wreak havoc on a once thriving market economy.
But of course inflation is purposefully resorted to in order to both aid the first receivers of money and create the perception of prosperity. With some prices boosted relative to others, there is the appearance of “feeling richer.” The overall supply of goods hasn’t increased; only the amount of pieces of paper with dead Presidents in circulation. The short term boost in confidence comes at the cost of long term stability as capital is consumed with little savings being accumulated for replenishment. The inevitable bust, as Ludwig von Mises showed, cannot be avoided.
The End of the Monetary System as We Know It (TEOTMSAWKI)
As governments continue to binge on endless servings of liquidity financing, there is little threat to gold’s price in the long term. Short term fluctuations are an inherent feature of a market system based on the ever-changing value judgments of billions. There is no conceivable end in sight to inflating currency supplies. If central banks were to stop inflating the house of cards that is the global banking system would collapse.
The question is where you put your trust? In the promises of highway robbers who climb their way into public office through lies and vicious personal attacks? Or in a commodity that has thousands of years of historical usage to prove its functionality as a means of exchange?
Bill Gates puts his faith in the goodness of scoundrels.
Imitator, Follower and Searching for a Purpose
The fact of the matter about Bill Gates is that he has never innovated. The only thing he has ever done that paid off incredibly well is this: he finnagled his way decades ago into the position of being the sole accepted computer operating system at the very start of the personal computing revolution. Since then he has lived off of having that incredibly powerful position.
He was incredibly slow to realize the power of the internet, he was always second to the party with inferior products like Internet Exploder, Zune and countless other copycat, failed products. He installed a completely insane man to manage Microsoft after he left. And now that he has some extra time on his hands he has decided that a) the planet needs to be depopulated and b) he will use a significant amount of his time and power to help depopulate it.
He is pathetically searching for a purpose. And, since he has no idea how economics works, nor money, as he shows in his interview on gold above, he has decided to make depopulation his purpose as he shows in this awkward, ridiculous speech given at TED where he uses all kinds of incorrect premises such as manmade global warming being real to come up with this unbelievably absurd "mathematical" formula:
CO2 = People x Services x Energy Per Service x CO2 Per Energy Unit.
Then he adds that in order to get CO2 to zero, "probably one of these numbers is going to have to get pretty close to zero." And given that he is spending much of his free time with famous misanthropes such as Ted "A total population of 250-300 million people, a 95% decline from present levels, would be ideal," Turner, it is pretty clear which one will be the top priority.
It's the most absurd premise based on the most absurd assumptions I think I have ever heard in my entire life. And his understanding of gold is just as flawed.
Bill Gates, Warren Buffet and Charlie Munger may have once had some sort of relevance. But, today they are globalist shills pathetically trying to keep an immoral and violence/theft based system alive by which their importance and life's work are tied. The world is leaving them behind... and they will work to enslave it (the Buffet Rule) or genocidally kill it (depopulation through vaccines) if they have to in order to maintain their sense of self-importance.
Buy gold (and diversify it globally as we outline in Getting Your Gold Out Of Dodge), sell MSFT and Berkshire Hathaway and fiat dollars, sit tight and be right. The fact they are all running to CNBS in the last few days must mean they are getting desperate.
The chickens are coming home to roost. Buffet, Munger and Gates are grasping at straws, trying desperately to do their part to keep the debt bomb from exploding. Subscribe today to The Dollar Vigilante for insights into the best ways to protect yourself through denationalizing yourself and your wealth.