A Civilized Rebuttal to Charlie Munger
Warren Buffett's own father, Rep. Howard Buffett, recognized the monetary role of gold in empowering the masses to protect themselves from the effects of uncontrolled spending in Washington. Back when you were a young lad, in an essay titled Human Freedom Rests on Gold Redeemable Money, Buffett explained: "Far away from Congress is the real forgotten man, the taxpayer who foots the bill. He is in a different spot from the tax-eater or the business that makes millions from spending schemes. He cannot afford to spend his time trying to oppose Federal expenditures. He has to earn his own living and carry the burden of taxes as well." At the close of the piece, Buffett concluded: "There is no more important challenge facing us than this issue -- the restoration of your freedom to secure gold in exchange for the fruits of your labors."
I wonder, Mr. Munger, was Warren Buffett's father uncivilized? Even as I take exception to your repeated assaults against the character of those who have seen fit to acquire some exposure to gold, I take pleasure in locating patches of common ground between us. I remain a big fan of your 2010 parable -- your cautionary tale in which a nation's addiction to casino gambling (derivatives) leaves foreigners, "particularly foreigners with savings to invest," deliberately avoiding that nation's currency and bonds.
At the time, I hailed your piece as "a timely attempt to instruct a nation in the basic foundations of fiscal solvency and the potential perils of our current trajectory." I consider it my duty to inform you, however, that any scenario involving a substantial decline in foreign demand for U.S. currency and bonds will necessarily invoke a major move into gold that would have wildly bullish implications for the metal's price. So if one were to grow wary of saving capital in U.S. dollars, but risks being labeled as uncivilized for looking instead to gold, I wonder... where would you have them go?