Warren Buffet on gold, demonstrating yet again why so many people trust him to manage their investments. Despite the fact that gold is just a metal originally valued because it’s pretty and easy to work without significant heating, it’s now somehow become this really important store of value when investors are worried. I feel like it’s some kind of psychological thing; people like to have stuff when the market crashes instead of just certificates, even if that stuff is basically useless. (You can’t eat gold, nor can you sell it to be made into much other than jewelry - and in many places where gold jewelry is common, it’s being used as a store of value rather than ornamentation anyway.)
How desperate are investors to buy gold? Right now, they are buying up so much that vaults are literally running out of room. Newly mined gold and liquidated gold jewelry is increasingly ending up in these big vaults in Fort Knox, London, Perth, Singapore and elsewhere, all stored in the names of investors who think they’re buying up an asset that will somehow keep them rich through a big financial crash.
Not only is a really bizarre-seeming cultural institution, but it’s also a suboptimal strategy in the event of a crash (since governments and other big investors would have to draw down their reserves, which means falling gold prices). On the social side of things, it’s a serious problem because it means that instead of the wealthy investing in new businesses (which hire new staff and offer desirable new goods and services) they’re investing in shiny rocks which they then lock up in vaults forever. Putting money in gold is probably the most effective way to choke off any broader social impact of your investment.
The kingdom of heaven promised us certain things: it promised us happiness and a sense of purpose and a sense of having a place in the universe, of having a role and a destiny that were noble and splendid; and so we were connected to things. We were not alienated. But now that, for me anyway, the King is dead, I find that I still need these things that heaven promised, and I’m not willing to live without them. I don’t think I will continue to live after I’m dead, so if I am to achieve these things I must try to bring them about – and encourage other people to bring them about – on earth, in a republic in which we are all free and equal – and responsible – citizens.
Now, what does this involve? It involves all the best qualities of things. We mustn’t shut anything out. If the Church has told us, for example, that forgiving our enemies is good, and if that seems to be a good thing to do, we must do it. If, on the other hand, those who struggled against the Church have shown us that free enquiry and unfettered scientific exploration is good – and I believe that they have – then we must hold this up as a good as well.
Whatever we can find that we feel to be good – and not just feel but can see with the accumulated wisdom that we have as we grow up, and read about history and learn from our own experiences and so on – wherever they come from, and whoever taught them in the first place, let’s use them and do whatever we can do to make the world a little bit better.