Why buy gold?

[oec2000]

How comfortable would people feel on a gold standard if there were only 10% of GDP worth of gold in the vault?  Or how about 1%?  There must be a tipping point where fear of meeting redemptions comes into play.  And if redemptions aren't allowed, then what's the good of that?  

 

 

I would imagine very comfortable - given that people seem to be very comfortable right now with no gold in the vault (some central banks (UK, Canada) have very little gold left.

[ERICOPOLY]

His suggestion that if each of us only had $960 of currency (in his example, gold coins), we could only spend $960 is incorrect because it does not take into consideration credit creation and the velocity of money.

 

The questions of velocity of money and credit creation were deliberately left out as "an exercise for the reader" if you will.

 

You could have one ounce of physical gold backing a trillion ounces worth of credit for example.  But what kind of a gold standard is that?

 

Because I don't know the appropriate levels of velocity or credit (and I know many here do), instead of making assumptions I merely asked if $960 of money supply per person could sustain a level of per capita GDP in excess of 10.5x that.

 

Then you have potential panics where people want to redeem their money for gold -- imagine a run on the world bank.

 

In any event, once you pick a given level of velocity and credit you can support a level of real wealth only up to that point.  Then you have the same problem I initially posed -- how do you expand the supply of money to keep up with future needs?  Would you then hope for an ever-higher velocity, or would you stretch your gold further with more credit?

 

 

[Myth465]

 

As to your point about wage inflation, I believe that that the lower income groups in US have had virtually no increase in real wages in the past 2 decades (I'm not sure what the precise period is). Do you think they feel better because their nominal wages have gone up during this time? The bigger danger is if govt policies result in runaway inflation - real wages would likely fall in that scenario..

 

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

[ERICOPOLY]

How comfortable would people feel on a gold standard if there were only 10% of GDP worth of gold in the vault?  Or how about 1%?  There must be a tipping point where fear of meeting redemptions comes into play.  And if redemptions aren't allowed, then what's the good of that?  

 

 

I would imagine very comfortable - given that people seem to be very comfortable right now with no gold in the vault (some central banks (UK, Canada) have very little gold left.

 

Right, most people are comfortable because most people don't don't think about these issues as they go about their daily lives.

 

I used the wrong term when I said "people".

 

Okay, at what point would the "hard money advocates" feel comfortable.  You either keep your gold in the treasury and have redeemable notes in your wallet, or you take delivery of your gold by redeeming your notes.  It's a confidence game -- maybe a war triggers the panic for redemptions... I don't know.  But there must be a level where it become fiat-like.

 

Under our present fiat system, we have no gold backing it (for all I know).  So is 1 penny of gold backing it really going to make any difference?  Or 10 cents?  Hey, at least 10 cents on the dollar is better than nothing I suppose.  I believe the US faced redemptions that it was unable to meet, and that's when we left the gold standard -- so the US had too little in the vault.

 

 

[ERICOPOLY]

 

As to your point about wage inflation, I believe that that the lower income groups in US have had virtually no increase in real wages in the past 2 decades (I'm not sure what the precise period is). Do you think they feel better because their nominal wages have gone up during this time? The bigger danger is if govt policies result in runaway inflation - real wages would likely fall in that scenario..

 

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

 

 

It's also the rational way to think for somebody with fixed rate debt.  That 3% raise and 3% inflation actually makes that debtor richer.

 

[Myth465]

It's also the rational way to think for somebody with fixed rate debt.  That 3% raise and 3% inflation actually makes that debtor richer.

 

 

Something I didnt consider, but you are right. I dont give Joe enough credit sometimes.

[ERICOPOLY]

It's also the rational way to think for somebody with fixed rate debt.  That 3% raise and 3% inflation actually makes that debtor richer.

 

 

Something I didnt consider, but you are right. I dont give Joe enough credit sometimes.

 

My father bought the most house he could afford (maximum allowable debt) in 1970 at fixed 9% I believe.  He was relieved that inflation payed his house off quite rapidly.

 

So I grew up with a different perception of inflation.  I am biased towards not holding dollars for any significant period of time, and view bonds as a way to make nominal gains but at risk of losing a lot to inflation.  There is the gold crowd though -- if you question gold they'll shoot back with a form of "you're either with us or you're against us" argument, so "go hold your dollars and good luck!".  There are actually so many other dollar alternatives, so it's rather odd to hear it.  TIPS for example -- I don't really know the answer to this, but since their inception have they tracked closely the cost increases of a man's fine suit?

 

 

 

 

[Guest broxburnboy]

 

As to your point about wage inflation, I believe that that the lower income groups in US have had virtually no increase in real wages in the past 2 decades (I'm not sure what the precise period is). Do you think they feel better because their nominal wages have gone up during this time? The bigger danger is if govt policies result in runaway inflation - real wages would likely fall in that scenario..

 

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

 

 

It's also the rational way to think for somebody with fixed rate debt.  That 3% raise and 3% inflation actually makes that debtor richer.

 

 

There is no way that debtors will come out of this ahead-the bankers who run the show are the creditors and all these manipulations of currency volumes and interest rates are designed to profit these creditors. The bankers will end up with the real wealth - all the gold, foreclosed houses.. debt obligations etc. The taxpayer will take the real hit, and the defaulters end up with nothing.

[ERICOPOLY]

Gold has the disadvantage of supply being totally dependent on our ability to find it but it protects us from debasement. Fiat money has the advantage of flexibility to grow with the economy but it is subject to abuse by politicians. The question is which of these two is the lesser evil.

 

That's agrees with what I wrote above.  The first paragraph you wrote though didn't agree -- I was asking probing questions and you mistook them for a position -- easy enough misunderstanding as questions can sometimes be rhetorical -- I figure that's where you got on the wrong track.

 

[ERICOPOLY]

 

As to your point about wage inflation, I believe that that the lower income groups in US have had virtually no increase in real wages in the past 2 decades (I'm not sure what the precise period is). Do you think they feel better because their nominal wages have gone up during this time? The bigger danger is if govt policies result in runaway inflation - real wages would likely fall in that scenario..

 

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

 

 

It's also the rational way to think for somebody with fixed rate debt.  That 3% raise and 3% inflation actually makes that debtor richer.

 

 

There is no way that debtors will come out of this ahead-the bankers who run the show are the creditors and all these manipulations of currency volumes and interest rates are designed to profit these creditors. The bankers will end up with the real wealth - all the gold, foreclosed houses.. debt obligations etc. The taxpayer will take the real hit, and the defaulters end up with nothing.

 

I was thinking actually of the people struggling with these big mortgages -- people who will never own their houses outright without a tailwind of inflation.

 

Personally, it sounds like I'll be able to pay off my mortgage with the gold in my wedding band and my wife's jewelry box.  Now if the wedding band, jewelry and my mortgage were all I had, I'd be doing well.

 

Or perhaps I'll just go out and pull some apples from the tree, get a few hundred thousand for them, and then use that money to pay off the house.

 

Alternatively, the average Joe who has a big mortgage but perhaps less gold should buy up as many houses as possible with as much debt as possible.  After the Zimbabwe inflation plays out overnight, he can then go and exchange his copper plumbing for scrap and pay off the mortgage with the proceeds and likely still have enough money to purchase some plastic pipe as replacement.  

 

My father in California this past year had to replace the copper pipe from his swimming pool pump setup after 30 years of pool chemicals had corroded it to the point where it was leaking.  He got over $100 in scrap value for it, and replaced it with plastic pipe.  Soon that same amount of copper will fetch a million right?  A million would be enough to pay off the mortgages of several of his relatives -- and for what, giving up the pool pump?  California is full of swimming pools -- none of those people are losing their homes to Zimbabwe inflation.  Many of them would never have owned them outright by any other means.

 

And take a company like Seaspan -- why they will be able to sell one ship for hyperinflated scrap value and use the proceeds to repay the rest of the mortgages on their ships.  Unless you believe the cost of steel didn't go up in Zimbabwe?

 

I don't see how the debtors are the losers in hyperinflation.  Yes people will lose their jobs as the economy is destroyed, but that will happen as well to people without any debt.  Those people will still be paying rent -- the debtor will be relatively better off.

 

[Aberhound]

Perhaps there is a board member who was lucky enough to buy or inherit a Russian or Peruvian bond which promised repayment in gold. Bonds thought to be worthless were repaid with 1905 dollars. It was one of the rare investments which preserved value over generations.

 

As confidence in the USD and other currencies erode I predict that companies and governments which wish to borrow long term at reasonable rates will have to again offer gold backed bonds. Governments and companies who now accumulate gold at current prices will be in a position to continue to borrow while others suffer defaults because they will be unable to borrow at a sustainable interest rate. Fortunately, markets are more sophisticated than they were in 1905 so now we could have bonds backed by oil and many other commodities. The key is that confidence in fiat currencies is likely to erode much further.

 

I estimate that the price of gold will rise sufficiently so that it makes it possible to pay the accumulated debts with gold backed bonds plus bonds backed by other commodities. Since the amount of debt is expanding and the proportion of the debt that will be backed by gold is unknown, the price of gold required to reach equilibrium is hard to predict. Gold may also prove to be a valuable for space power where thin saves launch cost. I have been using $24,000 per oz.

 

 

[oec2000]

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

 

So, you are saying that you prefer something that makes you feel good even though you know it is not good for you? That's not value-like behaviour.

 

If you speak to Vancouverites who were not lucky enough to buy a house 10 years ago, you will hear many unhappy comments even from those whose wages are higher today because they feel they have been left behind. Of course, this is an extreme example but it would probably be indicative of how people would feel if inflation significantly outpaced wages. This is not a trivial risk, imo. People are not worried about inflation because we have had 30 years of relatively modest inflation.

 

I believe people felt very differently when they were experiencing the high inflation of the 1970s. Think back to when oil prices went to $150 in 2008 - do you think people were happy with $4 gas prices because their wages were rising? We were fortunate that those prices were not sustained for long. If I am not mistaken, the 1970s was something like that except that price increases were more sustained and broadbased and not just limited to a few commodities. Some debtors may have benefited from the inflation but it was a tough period with high interest rates, depressed asset prices and a stagnating economy. I can't think of many people who want to go back to those times.

 

Are we today looking through rearview mirrors to the benign inflation environment of the past 30 years and blissfully thinking that the Fed might not make policy errors that could result in rampant inflation? (Possibly like how so many thought the Greenspan put was a thing of such beauty - until it was not!)

 

You agreed with Ericopoly on how inflation benefits fixed rate borrowers. This is not a free lunch. Other members of society pay for it - savers, pensioners, pension funds, even our favourite P&C companies! And, we all know what happens to an economy that incentivizes borrowing and penalizes saving. It is not exactly what we need more of right now contrary to what Obama, Congress and Bernanke may be telling you.

 

I understand and agree with the arguments for the necessity of having some inflation (because of the downward stickiness of some prices). Having a gold (or some other) standard does not preclude inflation and the system worked well for many years.

 

The question is not simply whether a gold standard is a good/bad system. The system has its flaws which is why it was dropped. The question is whether the gold standard is a better system than the fiat money system that we have now that imposes no discipline on central bankers. The same thing could perhaps be said about the gold standard as Winston Churchill said of democracy - it is the worst form of government, except for all the other forms that have been tried.

 

The gold scarcity argument does not hold water. It's a straw man used to justify the fiat money system.

 

 

[oec2000]

Gold has the disadvantage of supply being totally dependent on our ability to find it but it protects us from debasement. Fiat money has the advantage of flexibility to grow with the economy but it is subject to abuse by politicians. The question is which of these two is the lesser evil.

 

That's agrees with what I wrote above.  The first paragraph you wrote though didn't agree -- I was asking probing questions and you mistook them for a position -- easy enough misunderstanding as questions can sometimes be rhetorical -- I figure that's where you got on the wrong track.

 

 

Get you now. The other reason I took it as your position was because you did not address Broxburnboy's question as to what was the point you were trying to make. I think I've adressed the scarcity issue extensively - it is not an insurmountable problem. So, leaving this aside, which of the two evils do you come out on? To me, it is obvious that some standard is better than no standard.

 

I'm no gold bug but I think Ron Paul makes sense sometimes (more so than some of those in positions of power or influence) and I think it is beneficial for some of these issues to be brought into the public debate. As you said, many people are "comfortably" unaware of the problems with fiat money.

 

 

[oec2000]

 

There is no way that debtors will come out of this ahead-the bankers who run the show are the creditors and all these manipulations of currency volumes and interest rates are designed to profit these creditors. The bankers will end up with the real wealth - all the gold, foreclosed houses.. debt obligations etc. The taxpayer will take the real hit, and the defaulters end up with nothing.

 

I think you give bankers too much credit. They are not that smart. :)

[Myth465]

Yes I am 100% certain that the average Joe likes his 3% raise even though inflation is 3.01%. I am also 100% certain he really doesnt understand, but prefers to say he is making $39,000 vs $33,000 a number of years ago.

 

Do you disagree?

 

I have a decent understanding and even I prefer option 1. Psychologically no one wants to make less.

 

So, you are saying that you prefer something that makes you feel good even though you know it is not good for you? That's not value-like behavior.

 

Markets are inefficient, lunches are not free, and people are not always rational. We both know that.

 

Extreme deflation and inflation are bad examples. The argument was 2% inflation was not such a bad thing and can help to keep the masses at ease. The argument was also that rational or not Joe wants his 2% whether prices rise or not. He doesnt really care, and likely wont care for the explanation.

 

Try showing your employees the CPI and raising there salary / lowering it based on it. Then tell them its rationale when salary doesnt move cause CPI was flat that year, and let me know how that works for you.

 

---

 

I dont agree with Eric. Its simple a fact I had not considered in relation to Joe and Jane. I found it interesting. My opinion in this discussion is irrelevant, because as it is we wont switch to gold. I am agnostic to gold as an investment, and have to use dollars to eat and pay rent regardless of how I feel. My goal is to protect / growth my wealth. Gold in terms of a discussion is interesting, but I dont understand it enough to put serious money into it.

 

People who like it pretty much say its always been worth something then stop. Thats not much better then the full faith and credit stuff, but at least you can spend dollars. Im all for a change but lets go with something useful at least. Oil, silver, wheat, something that has some value on its own. It seems foolish to me to get rid of fiat money and start a new system based on some shiny rock just because men thousands of years ago found it intriguing.

 

If the world falls apart, I would rather have a gun and some can food, instead of less then $100,000 (my net worth) in Gold.

[ERICOPOLY]

Gold has the disadvantage of supply being totally dependent on our ability to find it but it protects us from debasement. Fiat money has the advantage of flexibility to grow with the economy but it is subject to abuse by politicians. The question is which of these two is the lesser evil.

 

That's agrees with what I wrote above.  The first paragraph you wrote though didn't agree -- I was asking probing questions and you mistook them for a position -- easy enough misunderstanding as questions can sometimes be rhetorical -- I figure that's where you got on the wrong track.

 

 

The other reason I took it as your position was because you did not address Broxburnboy's question as to what was the point you were trying to make. I think I've adressed the scarcity issue extensively - it is not an insurmountable problem. So, leaving this aside, which of the two evils do you come out on? To me, it is obvious that some standard is better than no standard.

 

 

I don't come out on either side because I'm still exploring the limitations.  Now, if I had my mind wrapped around the finite supply of money I wouldn't have been asking questions.  I think the biggest problem facing this country is the debt load, not the money printing.  I read in Hoisington's letter that the quantitative easing program is not inflationary -- I haven't yet ruled that he is wrong.

 

I'm asking (and trying to stimulate) discussion of these things. I wonder (as an engineer would) about the mechanics of how a currency of finite supply can scale to a future world where there might be 10 times as many people and fifty times as much world GDP.  Using a metal that (despite increasing scarcity per capita) will "always" purchase roughly a fine man's suit.  It leaves me scratching my head as to how there can be enough to spread around under such a scenario without triggering an upward revision of intrinsic worth per ounce.  I tend to believe that population growth alone should raise it's intrinsic value per ounce for the simple reason that women demand jewelry and prefer gold (there are other uses too).  However if it's intrinsic worth rises due to population growth and demand, then it's not really a stable store of value -- then I wonder whether that will lead people to just sit on their money and wait for it to appreciate in real terms, and what would that do for the economy?  Money itself is not meant to appreciate in real terms to function properly -- it should be absolutely stable in an ideal world

 

Here is the quote of my addressing his question as to what my point of view is (in case you missed it):  

 

Regarding my point of view...

 

In a word: scalability.

 

I'm exploring the limitations of a finite supply of money.  It is desirable to have the supply of money grow with the needs of the economy, however it is not desirable for it to be abused.

 

So there is some benefit that fiat money brings to the table that gold could not provide, yet it's difficult to keep the leaders from abusing the ability to create new money.

 

Now one opinion I've stated about gold already in this discussion is that it's volatile in real terms (not just dollar terms).  It doesn't always purchase a man's fine suit -- at least it didn't earlier this past decade at $300.  I believe it oscillates -- perhaps due to manipulation or whatever.  Thus, that's a negative -- would TIPS do a better job I wonder.  El Erian of PIMCO expressed interest in purchasing TIPS in the next deflation scare.

 

[oec2000]

Markets are inefficient, lunches are not free, and people are not always rational. We both know that.

 

Extreme deflation and inflation are bad examples. The argument was 2% inflation was not such a bad thing and can help to keep the masses at ease. The argument was also that rational or not Joe wants his 2% whether prices rise or not. He doesnt really care, and likely wont care for the explanation.

 

People are not always rational but surely the posters here are all as rational as WEB. :)

 

Extreme (or at leasy high inflation) is what worries people about current Fed policies which it can pursue only because of a fiat money system so it is relevant to this discussion.

 

I am agnostic to gold as an investment, and have to use dollars to eat and pay rent regardless of how I feel. My goal is to protect / growth my wealth. Gold in terms of a discussion is interesting, but I dont understand it enough to put serious money into it.

 

It seems foolish to me to get rid of fiat money and start a new system based on some shiny rock just because men thousands of years ago found it intriguing.

 

You've got it backwards. Fiat money IS the new system that replaced the gold standard. Gold has been accepted as currency for hundreds if not thousands of years. Fiat money, on the other hand, is only decades old.

 

The same people who say they don't hold gold because they don't understand it fail to see that they happily "invest" in USD and other currencies without understanding them. I agree that it is tough to put a value on gold but the same should be said of USD. One thing is clear though - gold has over time held its value much much better than the USD and the GBP (which was effectively the "USD" 100 years ago).

[oec2000]

In a word: scalability.

 

I'm exploring the limitations of a finite supply of money.  It is desirable to have the supply of money grow with the needs of the economy, however it is not desirable for it to be abused.

 

 

You may have missed the point that Broxburnboy and I were trying to make because of your focus on the scalability of gold. Both of us have made it clear that it is not important that gold is the standard. It's just important that it be something whose supply cannot be easily manipulated or manufactured. I've mentioned SDRs (which is not even a real thing) as a possibility. The key is to have a standard to which money supply has to be tied - this is to prevent debasement by "lazy" govts trying to find an easy way to dispose of their debt. The supply of the standard does not have to be fixed - it can be allowed to grow at a pace consistent with the growth in world population for example.

 

Two of the most successful economies in the world - Singapore and Hong Kong - do not have central banks in the sense of the Fed. They only have currency boards whose primary role is to ensure the soundness of their currencies (which I believe are fully backed by foreign reserves). They can't willy nilly print money like the Fed can. This was why the speculators who so succesfully forced many Asian central banks to devalue their currencies were not able to do the same with the HK$.

 

It's true that having fixed standards can cause economic pain by tying up the hands of govts. However, it is preferable, imo, to allowing govts to kick the can down the road for the next generation to deal with.

 

 

[ERICOPOLY]

In a word: scalability.

 

I'm exploring the limitations of a finite supply of money.  It is desirable to have the supply of money grow with the needs of the economy, however it is not desirable for it to be abused.

 

 

You may have missed the point that Broxburnboy and I were trying to make because of your focus on the scalability of gold. Both of us have made it clear that it is not important that gold is the standard. It's just important that it be something whose supply cannot be easily manipulated or manufactured.

 

 

I didn't miss the point BTW.

 

It's simply not what I was talking about.  I know all about these positive aspects of gold -- they've been rehashed here a million times, and elsewhere billions of times.  I could just as easily have lectured somebody else on that topic in a pedantic tone -- however it wasn't the topic I was discussing!  I was discussing scalability.  It's annoying to try to discuss scalability and get a reply that shifts the subject to something totally unrelated -- like wheat and whatnot.  I'm quite aware of the possibility of a currency backed by a basket of commodities -- but I wasn't discussing that!  I was discussing the viability of gold as the only commodity backing the dollar -- I want to understand whether or not it is even possible anymore (without a drag from scalability).  Yes, it was possible throughout history but generally speaking the world back then was still discovering new and important reserves of gold in the ground.  We're going to reach a point where the amount mined will be insignificant (are we there yet?) relative to the needs of the growing economy.

 

In summary, I was exploring gold's viability as the only commodity backing it.  You guys were insistent on changing the topic to one where it's not the only commodity backing it.  And I got a lot of rude "you either get it or you don't" flippant statements which really adds a high degree of value to the discussion IMO.

[oec2000]

In summary, I was exploring gold's viability as the only commodity backing it.  You guys were insistent on changing the topic to one where it's not the only commodity backing it.  And I got a lot of rude "you either get it or you don't" flippant statements which really adds a high degree of value to the discussion IMO.

 

If you have an issue with the rude flippant statements, take it up with the appropriate poster. It has nothing to do with me. Please point out where my comments have been rude or flippant.

 

In your own words, "I am exploring the limitations of a finite supply of money." Is it not acceptable to respond to this comment by giving examples of how the supply of non-fiat money need not be finite?

 

[ERICOPOLY]

In summary, I was exploring gold's viability as the only commodity backing it.  You guys were insistent on changing the topic to one where it's not the only commodity backing it.  And I got a lot of rude "you either get it or you don't" flippant statements which really adds a high degree of value to the discussion IMO.

 

If you have an issue with the rude flippant statements, take it up with the appropriate poster. It has nothing to do with me. Please point out where my comments have been rude or flippant.

 

 

I wasn't taking it up with you.  However you referred to a point that "Broxburnboy and I were trying to make" in your post (the one I replied to) and I figure by directly putting his quote in there would be absolutely no confusion as to who I'm talking about.  He did it to three posters I believe (not just me).  At one point I believe you said I didn't properly address a question of his -- look, if somebody is going to act like an ass I don't feel it deserves a reply, but I replied to him anyhow.

 

In your own words, "I am exploring the limitations of a finite supply of money." Is it not acceptable to respond to this comment by giving examples of how the supply of non-fiat money need not be finite?

 

Yes it's perfectly acceptable.  You can have that conversation with Broxburnboy or whomever if you wish about non-finite money. But don't make assumptions that you need to teach it to me if I am silent on the topic (you told me I "missed the point").  I didn't engage you on that topic because I'm not thirsty for new knowledge about it.  I have no disagreements with anything you said about it, except your assumption that I missed your point.  I don't believe I passed any opinion whatsoever about non-finite currency backing, nor do I feel required to do so when I am probing about limitations of finite currency.  I never generalized about all non-fiat money, I very specifically spoke only of gold and it's finite nature.

 

 

 

[Guest]

I thought this was an interesting quote from Seth Klarman. I wanted to share it with you guys.

 

"Gold is unique because it has the age-old

aspect of being viewed as a store of value. Nevertheless,

it’s still a commodity and has no tangible

value, and so I would say that gold is a speculation.

But because of my fear about the potential debasing

of paper money and about paper money not being

a store of value, I want some exposure to gold."

 

 

[turar]

Do you have a link to the full interview/article for that quote? It seems to me he's not talking about himself there, but as a hypothetical third-person.

[Guest]

Do you have a link to the full interview/article for that quote? It seems to me he's not talking about himself there, but as a hypothetical third-person.

 

This is from a previous post on the board. Page 6, left side. Hope this helps!

 

http://www.gurufocus.com/news.php?id=106850

[good-investing]

Maybe this interview gives some insight on the question: Why buy gold?