Right, the escalating $27 trillion national debt has nothing to do with it.
The national debt was just $20 trillion when Trump took ofice 4 years ago. $7 trillion in 4 years. Of course the national debt was only $5 trillion when baby Bush took office in 2000. So from $5 trillion to $27 trillion in 20 years.
Gee, that can’t be the reason for buying gold, I’m sure (said with sarcasm).
And the deficit is accelerating. If Nancy keeps the House and if Covid goes another year, the debt will be $40 trillion before 2030.
But yeah, why would anybody invest in gold? Sheesh.
While Buffett’s purchase of about 21 million shares of Barrick might seem like he is changing his attitude about hard gold (bars), his investment in Barrick makes considerable sense. Note that the stock symbol for Barrick is “GOLD” so when the news states that Buffett buys “gold”, the actual news is that he bought a huge quantity of a stock in a mining company with with the symbol of “GOLD”.
From Buffett’s standpoint, Barrick pays a pretty good dividend plus has increased in value. A good stock for Buffett to add to his portfolio. (Which in reality is only about 0.3% of the entire B-H portfolio).
The big deal here is that Barrick is probably going to be the miner who will develop the Pebble Mine in Alaska. Pebble is the largest undeveloped Copper, Gold, Silver (and some Rare Earths too), in the world. And unlike lots of mines around the world, there is little concern for the eventual developer that some foreign country’s dictator will take it over after development.
Northern Dynasty (NAK) has spent years proving that this is a huge deposit and they just received the FEIS (Final Environmental Impact Study) from the COE. Completely favorable and contrary to the Greenies, there are no Salmon anywhere near this proposed mine. Alaska traded forested “State” land for this bare, dirt area that the Fed’s owned. Specifically for mineral mining.
Within the next two weeks, the ROD (Record of Decision) will be filed and the Fed’s will then turn it over to Alaska for their approvals. Alaska really wants this mine. Jobs, income, development for the local tribes.
Note that Trump had the Governor of Alaska down for a chat a few weeks ago.
And that’s why Buffett bought a huge chunk of Barrick. It’s an incredible opportunity for years and years of very profitable mining. And that’s the rest of the story.
I don’t see our debt crisis stopping with our current political structure. It is depressing, but the end seems very inevitable to me.
Trump talks about “restructuring our debt” sometimes, but that will not fix the problem and it is only a band-aid for our main problem - spending.
If you want to know what Buffet thinks about gold - read what Howard wrote in 1948
Warren’s father was a US representative from Nebraska. He described the situation we are experiencing right now quite simply and succinctly. He did allow that with the strength of our system, our economy, that it would take a while, but he was very prescient. Or at least honest enough to publicly state what would happen. Even Ray Charles could see what was gonna happen.
Warren knows too, undountedly. At some point everybody is read the riot act about acting in the American people’s interest. And everybody never speaks of certain things again.
Howard’s thesis here is that Human Freedom rests on sound money, an honest unit of account, and that printing press money always always ends in widespread misery.