Newstalk interviewed Mark O’Byrne, Research Director at GoldCore about gold’s value and utility and why it has had a value throughout history and it’s continuing value today as a hedge and a safe haven monetary asset.
Warren Buffett’s simplistically negative comments regarding gold are “wrong on so many levels” according to Mark O’Byrne of GoldCore.
The ‘Oracle’ on gold:
“gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
The ‘Oracle of Omaha’ is wrong due to the following important facts:
a) It does not get dug out of the ground in Africa. The largest gold producing nations are China, Australia, Russia, the United States, Canada, Indonesia and Peru.
b) Global gold refineries and government mints then melt it down and importantly refine it to make it 0.9999 pure or 24 karat and either produce investment grade gold bars or they mint legal tender gold coins, as produced by the Royal Mint, the US Mint, the Perth Mint, the Royal Canadian Mint, the Austrian Mint etc
c) We do not “bury it again.” Gold coins and bars are held in secure vaults, most of which have been built and exist for many years, within what is known as the “Chain of Integrity.” This is an important system of cooperation between accredited government mints, state and private refineries, security transport providers and secure vaulting providers
like Loomis, Brinks and G4S , auditors, banks, and insurance underwriters which make up a secure chain of custody for London Bullion Market Association (LBMA) “Good Delivery” gold and silver bullion bars.
These vaults are located very securely both above ground and in the basement of secure vault providers, the biggest banks and central banks – including the New York Federal Reserve and the Bank of England.
Yes highly trained, trusted security personnel are paid to guard it as they are to protect other valuable assets such as millions of dollars of legal tender dollars or indeed fine art paintings. Anything that has value has to be protected and securely stored and the act of guarding dollar notes etc, does not make them any less valuable or of use.
d) It’s proven utility is as a hedge in investment and pension portfolios and as a safe haven monetary asset that protects against inflation and currency devaluations. This is seen in all the data and the empirical research by academia and independent asset allocation experts. It has been seen throughout history and again in recent weeks, months and years.
e) “Anyone watching from Mars would be scratching their head” about many, many things on planet earth today.
Aliens would be particularly amused by our completely unsustainable, debt laden, economic models – both financially and environmentally. They would laugh their heads off at our ponzi style fractional reserve banking and fiat monetary systems which allow banks and central banks to electronically create trillions of dollars, euros, pounds etc at will …
NEWS and COMMENTARY
Gold gains as U.S. warning heightens virus concerns
Gold-Backed ETFs Have Never Seen a Run of Inflows Like This
Dow futures down 150 points after Wall Street’s monster 2-day slide
China’s January auto sales fell 18.7% year-on-year, worse than forecasted
Euro zone money markets price full ECB rate cut by December
Hong Kong will give HK$10,000 cash handouts for all adult permanent residents
GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
25-Feb-20 1655.90 1650.30, 1275.54 1271.39 & 1528.06 1522.73
24-Feb-20 1682.35 1671.65, 1304.49 1293.69 & 1555.84 1540.26
21-Feb-20 1633.70 1643.30, 1264.81 1269.12 & 1512.48 1515.29
20-Feb-20 1610.35 1619.00, 1250.11 1258.45 & 1491.99 1496.77
19-Feb-20 1609.50 1604.20, 1239.80 1237.80 & 1490.40 1486.29
18-Feb-20 1588.20 1589.85, 1218.47 1220.37 & 1467.34 1470.77
17-Feb-20 1580.30 1580.80, 1212.41 1215.16 & 1457.04 1458.29
14-Feb-20 1576.35 1581.40, 1209.60 1214.20 & 1453.08 1456.79
13-Feb-20 1575.00 1575.05, 1213.55 1207.59 & 1447.27 1450.94
12-Feb-20 1566.75 1563.70, 1206.55 1206.55 & 1434.83 1434.54