This morning, our editor Henry Blodget wrote a post on Warren Buffett’s brilliant explanation of the absurdity of gold.
The gist is this: If you had $10 trillion, you could buy a cube of all the gold in the world, or you could buy boatloads of productive assets
Read the rest here.
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I guess that’s why central banks have been buying gold bullion for the last five years. Because it is so absurd.
There are decades-long periods in which gold is worse than cash (1980-1999) and periods in which gold is one of the best investments around (2000-2011). And it variously outperforms or underperforms other assets in shorter time frames, just like anything else (stocks, cash, treasuries etc). So why these generalized pronouncements on ‘productive investments’, gold bugs etc? And that goes for both gold-lovers and gold-haters.