Saturday, May 5, 2012

I Can't Believe Charlie Munger (Buffet) Said This On TV

 "gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939 but civilized people don't buy gold"   - Charlie Munger on CNBC  LINK

Is that the first salvo by the elitists to start pointing the finger at the Jews and placing blame for the economic apocalypse brewing on anyone beside themselves?  This hauntingly reverberates of Germany circa 1934.

He made that remark in response to comments that hedge fund manager David Einhorn - who is obviously Jewish - made with regard to why he keeps a high percentage of gold in his fund
If we didn’t have a Jelly Donut monetary policy, I would sell gold, sell bonds and buy stocks. But, the Fed is filled with academics who thoughtlessly rely on econometric models that reflexively indicate that repeated Jelly Donut orgies are the best way to get a sugar rush into the economy. And, the Fed Chairman seems to have no trouble rationalizing any policy failure on the basis that ‘monetary policy cannot be a panacea,’ or ‘it’s bad luck,’ or as proof that he just hasn’t force fed us enough Jelly Donuts, yet. As long as this is the case, it seems unlikely the Fed will change course.”

“As a result, I will keep a substantial long exposure to gold — which serves as a Jelly Donut antidote for my portfolio. While I’d love for our leaders to adopt sensible policies that would reduce the tail risks so that I could sell our gold, one nice thing about gold is that it doesn’t even have quarterly conference calls.”
Here's the link from the HuffPo:  LINK

I have just two quick comments: 

1)  Gold is NOT an investment, per se.   Gold is the world's oldest currency and you exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.  Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured.

2)   I seriously can't believe that Charlie Munger made that comment for public consumption.  The Buffet Klan is slowly throwing gasoline on themselves and lighting themselves on fire in the eye of the public.  Anyone has the right to be a racist or harbor hate.  But for a highly public official or corporate officer - someone considered a business or political leader - to make those remarks on t.v. for public consumption, reveals just how infected our entire system has become with corruption, defamation, deception and overall societal decay.  It shows the extent to which our system is sliding in fascism and totalitarianism....

As it has been said..."good luck and good night."


  1. "Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured."

    Can you further elaborate on this comment? What are the benchmarks that you evaluate to determine gold undervaluation or overvaluation in relation to fiat currency? Do you look at total outstanding money stocks in relation to total vaalue of goods and services?


    1. Look at total global fiat currency in circulation - someone like Rickards recently calculated and implied value of $10,000 for gold based on that.

      If you apply the Bretton Woods standard, where all U.S. Govt debt issued has to backed by its supposed 8100 tonnes of gold, the implied price is $16,000.

      You can expand the analysis from there depending on whether or not you want aggregate global sovereign debt and divide by alleged global central bank holdings of gold, whether or not you throw in the NPV of sovereign entitlement liabilities, etc.

      You can simply use the historical Dow/gold ratio of 1. Look at that ratio before the 1913 establishment of the Fed. During 1800's, the Dow/gold ratio fluctuated around 1.

  2. Good thing a hard-nosed journalist like Becky Quick was there to call him on that comment.

    1. ROFLMAO.

      Everyone with a brain knows that she's an idiot and that she was spreading her legs for Buffet until she got married to some sap. She may still be sleeping with Buffet. It was obvious before she got married. It could be kept clandestine now.

    2. That would explain the constant post-coital expression on her face. I didn't know Buffet had it in him. Modern pharmaceuticals can work wonders.

  3. Here's the deal. The Buffet and Munger scam is ending. And they know it. Due to policies like NAFTA and GAAT, which these two buffoons were all cheerleaders for, there is no longer a future for the upcoming generations in America, and thus there will be no new generation to brainwash into buying shares. And they definitely know it. Anyone with a lick of sense can see what is going on and what the PTB will do in response. Print. And those with this lick of sense will hedge themselves by buying gold. Not Berkshire Fadaway shares. Munger can rot away in the same nursing home as Jack Welch. Another NAFTA/GAAT cheerleading buffoon.

  4. People demand freedom of speech as a compensation for the freedom of thought which they seldom use.
    – Søren Kierkegaard

    There are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true.
    – Søren Kierkegaard

    "Gold goes as high as the debt hole goes low."

    Recently Ben Bernanke and other really smart people have been on a
    Gold bashing campaign which they are terming "transparency." Why now?
    Well, because they have to. They have to because as the debt hole gets
    deeper and deeper, more and more people understand that it can never
    be paid back and their minds begin to wander. The central banks of the
    world just don’t want these wandering minds to end up coming to the
    conclusion that their money really isn’t money at all. So Gold gets
    bashed with untruths and a smear campaign (not to mention the millions
    of fake paper contracts) so as to divert the wandering minds (as many
    as possible) from the truth.

    After what we have been through since 2007, you should probably now
    understand why. They don’t want Gold in the system. Gold takes actual
    effort, machinery, (real capital) to produce, and it is rare.
    Politicians and central bankers would be precluded from handing out
    free money to friends, cronies etc. at a whim. Bankruptcies would…
    well… be bankruptcies and bailouts wouldn’t exist. They couldn’t.
    Think about it, who would be stupid enough to give away something that
    is real, rare and valuable to save someone else? Surely not any of the
    greedy scum who run the show now. No, failures should simply fail and
    capital would be cared for and risk actually avoided. In this manner,
    capital would efficiently find its way to investments and the AIG’s,
    Fannies and Freddies, Solyndra’s, GM’s, and bridges to nowhere would
    not exist, be built or even contemplated.

  5. credible charlie at it again..look at date.

    Janet Tavakoli on the "Myth of the Amoral Debtor"; An email from a
    Charlie Munger student; "Business as Usual
    You'd think Munger had been living under a rock. Yet, he hasn't been,
    and I believe he knows better. Buffett knows better, too.
    Unfortunately, instead of using their positions to tell the truth,
    they are using their positions to propagate what Elizabeth Warren
    calls "the myth of the amoral debtor."

    I'm no bleeding heart; I'm all about the cash flows.

    Investment banks knew the cash flows from these loans wouldn't be
    there, but they went ahead anyway. Thus, they are responsible for
    widespread securities fraud. To keep it going, they created more
    complex securitizations and got more people involved to cover up the
    mounting losses that were coming down the pike. This was all known and
    knowable in advance.
    Warren Buffett has made statements that he doesn't see the purpose of
    going after people. That's ridiculous.

    I am in complete agreement with William K. Black that thorough
    investigations are long overdue. The crimes aren't in doubt, but one
    has to go through the arduous task of collecting evidence even though
    delays have made the trail cold. That was deliberate.

    I am a University of Michigan student and I was present for Charlie Munger's talk on campus. You probably wouldn't have been able to sit through the whole thing without screaming obscenities. There was question asked about gold and Charlie said he would never own it. There was also a question about derivatives and Charlie insulted that person as well. Correct me if I'm wrong, but didn't Berkshire purchase a large quantity of silver below $5? Didn't Berkshire get involved in the derivatives market?

  6. do you trust charlie?

    A reserve currency can only function as such if there is a general consensus that it provides a stable store of value. Without this trust, money, no matter what form it takes, will be abandoned—either suddenly in a crisis, or gradually over time—in favor of something else. The Golden Revolution looks at how the world is rapidly moving toward some form of global metallic standard, in which money, at least in official, international transactions, is linked directly to gold, silver, or both.

    The practical reality of the transition to the coming global gold (or bimetallic) standard is going to be substantially different from the global fiat monetary and financial regime of today. It is not just money that is going to change. The nature and business of banking will also be affected, as will finance in general.

  7. berkshire as we know has large investments in banks-lousy balance sheets and "specialized" accouting.

    Berkshire sold a mother load of index puts in December 2007 and as the market started selling off in 08 Mr Buffette's answer to avoiding complete write down was that these were long term puts and by the time they come due the market would reverse back up--he was right so far but he used mark to fantasy.
    Give him props--he made a lot of money--but a lot of it in the glory days of the US. Now when things tougher he ain't doing nearly as well.

    Sometimes its better to be lucky than good, and be at the right place at the right time. The hedgies--esp the early ones had replaced Buffett as investing leaders.

    PM--like the Tortoise, will out cause the fiat currency debasement is fait au complete.

    Speaking of being at the right place at the right time, the PM time appears to be approaching.

    "It's PM time"

    Too bad everything else will be a problem.

  8. So old, so experienced and yet so damn NAIVE !!!
    Swiss Genome

  9. The air is mighty fine and rarified in the privileged and elitist circles in which Charlie travels. The unwashed masses of the world aren't fit to shine his shoes.

  10. I watched Becky Quick's interview of Munger. The gold comment was intended more as a disparagement of a "barbarous relic" than anything else. Moreover, even dear, deluded, waiting-for-his-next-bailout, Charlie Munger had one glimmer of a clue: namely, he talked about us using up our economic virtue, saying that keynesianism can work for a very "virtuous" society, at least until that virtue is expended. What Charlie failed to realize is that he was not describing "virtue," he was describing capital. As Lady Thatcher famously observed, socialism works fine until you run out of other peoples' money. Likewise, you can get away with practicing keynesianism until you exhaust your accumulated capital.

  11. Hi Dave,

    Iam sure your heard of Another, FOA and FOFOA. They state, gold prices the Dollar and the Dollar prices the rest. Iam curious what u think of that.

    1. I'm not sure how they can say that gold prices the dollar. By the time gold prices fiat currencies, the dollar will be either collapsed or near-collapsed.

      For now, as long as enough big market players are still willing to accept paper to settle trades and commerce, gold is not driving the bus.

    2. According to Another and FOA, the dollar has already collapsed.

      Personally, I think Canada+America+Mexico will combine their currencies and create some North American Union currency (the Amero?) to compete against the EU and other monetary unions that are currently in the works.

      -Sicilian Gold

  12. Can you imagine how prescient someone would have to be to sew gold into their garments in 1938 or during/prior to any disaster. 99% of people (the 99%... hmmmm) would simply not understand prior to and even in the beginning of a economic disaster the gravity of the situation. Most people would be more concerned with their day to day problems and expect the government to continue to somehow provide whatever it is governments provide. My parents were married in 1933 and their family's story of suriviving the great depression is a valuable lesson. But I remember one question I asked as a young child that helped me finally put some things in perspective. I asked my mother why my grandparents and their children didn't do more after 1929 and prepare better and start growing their own food earlier, etc. She said simply that no one knew it would last so long or get so bad. The government kept promising to fix everything and that their policies would turn it all around soon. Year after year of unemployment and promises and finally people realized it wasn't going to get better anytime soon. Nothing FDR did actually worked and got us out of the great depression. Actually it was Hirohito and Hitler that triggerred the events that ended the world wide depression. War and the massive effort to fight it corrected the economic disaster of the 30's. Everything FDR did either made it worse or had little to no effect. Ironically we are following and planning on following those same disasterous polices to fix the current great depression. Don't wait to prepare for a decade long depression. We are already in it and sooner or later the governments credit card will be revoked and they can no longer hide it. Can you feed yourself and heat your home without money and a viable national food and resource system? If you cannot then be prepared to explain to your kids or grandkids why you did nothing when it should have been obvious to anyone with average IQ that you were/are in deep trouble.

  13. When the fundamentals are supposed to be Gold positive - with Europe's elections, the dollar not even shooting to the moon and precious metals can't make it. A forth month will be added for a down month for precious metals. Silver now is so crushed psycologically who in their right mind will buy physical with sales tax included and premium and delivery???

    so when are the gold bugs going to chuck in the towel with miners. they can't do anything about it because they are all in already? With an XAU/Gold ratio of 0.095 - close to year 2001. What is the point really to go through this crap every two years or so. And the markets aren't yet even reflecting a 2008 crisis.

    This is a big ponzi scheme - no new gold bulls coming in and all the old one are fully committed. They have to start selling physical gold to buy "bankrupt" valuation gold miners.

    The S&P in the green and copper is the least risky metal. Gold is riskier than copper!!!!!

    Have you seen Hecla......

    This isn't investing it's called trading and for muggs.

    Buffett and Munger have always been proven correct in the long run. Similar to the Nasdaq bubble.

    1. Buffet and Munger always right in the long run? Look at that LONG RUN chart i posted today. Go suck Buffet's dick. I normally don't post these absurdly idiotic troll rants, but you are the perfect example of why Hulbert's senitment statistic with regard to stupidity like your's is remarkably accurate over long periods of data measurement:

      Don't bother sending in your crap for posting again unless you can back up your assertions with some data and facts, like I do.

  14. Hi Dave,

    In case you are interested here a piece discussing it;

    To quote;
    '' ANOTHER (THOUGHTS!) ID#60253:

    All modern digital currencies do not go into an investment, they move THRU it... There is an alternative. Gold! It is the only medium that currencies do not "move thru". It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say "gold moves thru paper currencies".

    This is the key to EVERYTHING!!! It is not "gold liquidity" that the bullion banks create... it is DOLLAR LIQUIDITY. Dollars bidding on MSFT stock set the value of that stock. If dollars are frantically bidding on MSFT (high velocity), the stock skyrockets. If dollars stop bidding for MSFT all at once (low velocity), the price falls to zero. This is true for everything in the world except gold.

    Gold bids for dollars. If gold stops bidding for dollars (low gold velocity), the price (in gold) of a dollar falls to zero. This is backwardation!

    Fekete says backwardation is when "zero [gold] supply confronts infinite [dollar] demand." I am saying it is when "infinite supply of dollars confronts zero demand from real, physical gold... in the necessary VOLUME." So what's the difference? Viewed this way, can anyone show me how we are not there right now? And I'm not talking about your local gold dealer bidding on your $1,200 with his gold coin. I'm talking about Giant hoards of unencumbered physical gold the dollar NEEDS bids from.''

    I agree with you that what is needed is settlement in gold. Trades can be done in paper. Settlement can not be done in paper indeed. Not even in the (once) mighty US treasurybills.

    I hope you do enjoy the reading.