Yes, Um, Your Gold Please...

From the Writers at Agora Financial...(with a twist of sarcasim)


There he goes again.

“A decent productive asset will kill an unproductive asset,” said Warren Buffett yesterday on CNBC.
The “unproductive asset,” as if you hadn’t guessed, is gold — which is once again in Buffett’s sights.
“When we took over Berkshire,” he prattled as Becky Quick looked on worshipfully, “Berkshire was selling at $15 a share and gold was selling at $20 an ounce. And gold is now $1,600 and Berkshire is $120,000.”
Ah, the old selective time frame trick. Almost makes us wonder if someone slipped the Oracle this piece of Addison’s from The Daily Reckoning — complete with the following chart…


Nor does the chart tell the whole story, for what would Berkshire be today without the $700 billion monstrosity known as TARP?
“Berkshire Hathaway firms in total received $95 billion in TARP money,” Addison writes in the most-recent Apogee Advisory. “Berkshire, you’ll recall, held stock in Wells Fargo, Bank of America, Goldman Sachs and American Express. Not only did these companies receive TARP funds… they also dipped into the FDIC’s treasury to back their debt. Total bailout: $130 billion. TARP-enabled companies accounted for 30% of the Oracle’s publicly disclosed stock portfolio.
“And to sharpen the sting, he even got a better deal to help ailing Goldman Sachs than our own government. Buffett got a 10% preferred dividend, while the Feds got all of 5%. He cleaned up with $500 million a year in dividends. Without the bailout, you can bet many of his stock holdings would have gone near-zero instead.”
“I think gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939,” added Buffett’s right-hand man Charlie Munger last week, “but I think civilized people don’t buy gold. They invest in productive businesses.”
That… or they suck on the taxpayer teat, while telling the rest of us to “suck it in.”
Recall it was Munger last fall who told a group of college students, “You should thank God” for bank bailouts, for the alternative was too horrible to contemplate. “Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens.”
[Destroy the currency? Isn’t that why you keep gold? But we digress...]
“Now, if you talk about bailouts for everybody else,” Munger went on, “there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.
“At a certain place, you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.”
There, in a few outrageous sentences, you have the raw essence of what’s increasingly labeled the “extraction” culture.
“Washington’s empire extracts resources from the American people for the benefit of the few powerful interest groups that rule America,” writes economist Paul Craig Roberts. “The U.S. Constitution has been extracted in the interests of the Security State, and Americans’ incomes have been redirected to the pockets of the 1%.”
Addison delves further into this theme in the next issue of Apogee — examining perhaps the mother of all “extraction” schemes. If you have an IRA or 401(k), you don’t want to miss this issue, only days away.

http://5minforecast.agorafinancial.com/did-he-just-call-you-uncivilized/