I’ve hinted around at this occasionally here as to why I don’t invest in gold but Buffett is far more eloquent – and specific – on the issue (from last week’s Forbes):
I would assign the probabilities at 37 percent that au dips below 1000 in the next five years and 58 percent that it exceeds 2750. There is a 10 percent chance it will exceed 3,300. And a four pecent chance it will be below 800.00.
Some time in the next 12 years I would say there is an 85 percent probability it will exceed 2500.00.
However I had trouble in calculus so I would ignore what I just wrote
[quote=walterwhite]why do central banks hold gold?[/quote]
Why do peacocks have big colorful tails?
It has no practical use. In fact, it’s a liability: The tail makes it easier to get caught by predators and dragging that thing in the dirt increases chances of infection.
Hint: What would happen to the one peacock that was born without a big tail? Would he have a better chance of “survival?”
[quote=walterwhite]You say tradition like it’s a bad thing.
Money itself only has value because we respect it, it is traditionally accepted.
The substance with the longest most widely accepted tradition of acceptance is gold.[/quote]
No, I’m not saying tradition like it’s a bad thing. I’m merely stating – factually – that it’s nothing more than tradition. That the tradition has held for very long period of time doesn’t change the fact that it’s still… tradition. If it makes you happy then I’ll add that “there are far worse traditions”. At its base, however, it’s still a religion of sorts… albeit a long-tenured one.
Back in the day (6 or so thousand years ago), it was hard to find stuff that stayed shiny and was easy to mold into shapes.
On second thought now that I have the urge to toss my career and go operate a Sluice Box boat on the Bering Sea, it’s probably not a good sign.
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