“It 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.”
– Warren Buffett
In response, LargoWinch applies the same logic to fiat currency: “It comes in abundance from trees with little to no efforts, we print as many as we want and assign whatever “value” to it, but we make certain that it contains official looking faces and logos so that we can pay people (yes, with “it”) to stand around guarding it.”
And unlike Buffett’s preferred investment, stocks, the accounting for gold is much simpler: you weigh it with a scale. Gold won’t go up forever, and there will be a time to sell, but it’s a heck of a hedge against dishonest companies who are cooking the books and dishonest politicians who are debasing the currency through inflation.