Welcome, WealthCycles readers. As many of you already know, Warren Buffet released his annual letter to shareholders for 2012 over the weekend. His letter is lengthy, so we cut it down to a fun report on the most important subject, gold, and let our readers reply.
The insights posited by our readers, such as this gem, “You will have to produce more and more at an increasing velocity,” do much to illustrate the central fallacy in Buffet’s argument.
Buffet deliberately treats gold as an investment, not as money, keeping stride with the big lie: gold is not money, but merely an inedible commodity.
Yet in the pile A and pile B exercise Warren postulates, he sees both piles as speculative investments--Investments “which will have to produce more and more, at an increasing velocity” to increase in real value, measured in purchasing power.
A good or asset's ability to be exchangeable or replaceable in whole or in part with a good or asset of the same type.