There are 3 categories of investments: anything denominated in a
currency, items that you buy that dont produce anything but you hope
someone will buy from you in the future (gold), what it will produce
like a farm and you decide what to pay based on what it will delver
over time.
WB pulled out a 1 dollar bill, it says in god we trust and that is
false advertising. If elizabeth warren were here she would say in govt
me trust and if govt acts wrongly. any currency based investment is a
bet on how the government will behave. if you lived in zimbabwe.
almost all currencies have depreciated over time, unless we are
getting paid extremely well they dont amok sense.
All the gold in the world into a cube 68 feet on a side. You could get
a ladder and sit on top of it and say, you could fondle it, you could
polish it, but its not going to do anything. Al you are doing is
hoping that someone will else will buy it from. Keynes described this
in chapter 12, the beauty contest. Anytime you buy an asset that cant
do anything, you are betting someone else will pay more. We did that
with silver but silver had industrial use. I was off on 13 years
if you buy that farm and how much will it produce and how much you
have to pay, logically you should not care what the price is tomorrow.
cotton doubled in price, much to the chagrin of fruit of loom, and if
you go back in time cotton isn't exactly a great investment but it has
a productive use.
Rising prices cause excitement and your neighbor owns gold and you
think you are smarter than he is and your wife asks you it can cause
prices to rise.
CM - somethign peculiar about buying an asset if the whole world goes
to hello, if you courtly is trying to kill you then maybe but then
probably other coutnries are going to hell but id prefer BRK. Other
people like to buy paintings of soup cans but i don't recommend that
either.
WB - we producing more gold every year, dig it up in africa bury it in
ny fed reserve. 1b acres of farmland valued at 2 trillion, take ten
xom 4 trillions, you could own all farmland and 10 XOm or the cube of
gold you can fondle. that may seem like a close choice but not to me
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