Gold: The Misunderstood Investment

Disparaging Views on Gold

Prominent figures such as Warren Buffett, Dave Ramsey, and John Maynard Keynes have all expressed negative views about gold. Keynes, known as the father of Keynesian economics, famously referred to gold as a "barbarous relic", criticizing the gold standard and its use as money. He particularly disliked the constraints the gold standard placed on government spending. Following Keynes' lead, Warren Buffett, the successful investor and son of renowned investor and Congressman Howard Buffett, has also criticized gold as an investment, citing its lack of yield. Similarly, popular radio personality Dave Ramsey has dismissed gold as a "shiny, shiny rock" with no yield and a poor investment choice.

Gold's Role in Society

Despite these criticisms, gold continues to hold a significant place in society. In an era characterized by inflation, individuals like Buffett and Ramsey are praised for their cautionary stance in a financial environment distorted by excessive government spending, limitless borrowing, and the printing of fiat money. However, it's important to note that the negative views on gold and the gold standard have become a standard belief and a pillar of the modern state. In contrast, ordinary people still instinctively see gold as a symbol of excellence, even more than fifty years after the last remnants of the gold standard were removed. Gold medals symbolize the highest achievements, while silver medals represent the next level down. Teachers and parents still use the "star system" where gold or yellow stars represent the highest achievement. Even in marketing, companies strive to claim that their product or service is "the gold standard" in their industry.

Investment Misconceptions

Gold is not primarily an investment. Gold and silver have been the most advanced forms of money for thousands of years before the "age of inflation". Technically, gold and silver are not money now, but only because they were forced out of that role by the state. Warren Buffett's objections are countered by the fact that he is often known as the "king of cash", frequently holding large amounts of cash in his company's balance sheet. A simple comparison of the average closing prices for gold, the Dow, and the S&P 500 during 1971 and 2023 shows that gold's value increased 47.5 times, the Dow increased 38.6 times, and the S&P 500 increased 44.6 times. This comparison does not include reinvested dividends, capital gains taxes on stocks or fees, or the annual safety deposit box fee.

The Influence of Keynes, Buffett, and Ramsey

John Maynard Keynes was a socialist who preferred a state with unrestricted borrowing and spending. The anti-gold dogma propagated by the Federal Reserve's propaganda machine is deeply ingrained in society. Both Buffett and Ramsey have fallen for this statist belief.

Bottom Line

The views of Keynes, Buffett, and Ramsey on gold are not only contradictory but also fail to consider the historical and societal significance of gold. While it's not suggested that all your money should be invested in gold or silver, having a portion of your investments in precious metals can protect long-term purchasing power and diversify your assets. What are your thoughts on this perspective? Do you agree or disagree with these views on gold as an investment? Share this article with your friends and let's have a conversation. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.