by Alec Hogg
A a gold bug friend who has been silent for months became rather animated this week his dreams seemed to have been answered all at once. Global markets staggered in the wake of the China Market Crash and bullion enjoyed a time in the sun.
Anyone raised on the Gold Boom of 1980, or who witnessed the nine year Bullion Run from $250 to 2011’s peak of $1900 finds it easy to catch gold fever. But over the years, my perspective what does and does not make an investment has also changed.
Nowadays I’m firmly in the Warren Buffett school of gold sceptics. As he famously told us at an AGM, if you took all the gold ever mined, it would fit into a cube of 68 feet. You can sit on it, polish it, look at yourself in it and even get a warm fuzzy feeling about it. But gold remains an inanimate object whose only value is when it is sold at a higher price to someone else. Often the greater fool.
Like Buffett, I now prefer betting on leveraging the human ingenuity that exists in well run companies.
From Biznews community member Norman
I am the representative for the largest stock of gold in the world and the people that own it are very powerful and influential on a global basis. I enjoy your business news, especially seeing that we are thinking of investing possibly in renewable energy in South Africa. What I would like to correct you on, is while Warren Buffet is a genius on the stock market his knowledge on gold is what you can Google and that is far from the truth. Countries have been printing money (“fiat money”) for years and there has to be a tipping point and gold is the real collateral for proper money. Warren Buffet is a very wealthy man by western standards but is hardly even a significant player by other standards. Correct me if I am wrong but I also believe that gold has out performed the stock market over say a 10 year period. I do not want to be quoted but I can inform you as someone from the “inner circle” you should caution your comments on gold, as the true value is not the price as quoted, it is being held down. Neither I or my principals feature on Google.
From Biznews community member Chris Becker
Alec, gold isn’t an investment at all. It’s a bet on monetary disorder. Gold is a sound currency that competes with fiat currencies. It can also be leased to yield a rate of interest. But it will never compete with the returns that come from leveraging human ingenuity.
Yesterday’s top stories:
Steel penny drops – ANC refuses to sacrifice local industry for Chinese friendship
Dead wrong: Mugabe promises Zim will get China-driven economic growth
More Govt intervention flops; Chinese market falls again, Crash now 25%
Cees Bruggemans: Is a Recession only a matter of time?
ANC shedding support – wants to ‘mend its ways’
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