Did Warren Buffett’s Dad Just Get a Whole Lot Smarter?

Billionaires are Profiting During the Pandemic

We learn from Forbes that the pandemic lockdown has been very, very good for Warren Buffett’s fortunes.  

On March 18, 2020 his net worth was $68 billion.  Now its $80 billion.  40 percent of Americans may be out of work, and 100,000 business have disappeared forever, but with $3.2 trillion of Coronavirus bailouts having washed under the bridge, Warren Buffett is up $12 billion.

And he is not the only one.  Warren is only number four on the list of wealthiest billionaires these days.  Above him are Bill Gates, he’s up $16 billion during these dark times; Mark Zuckerberg, who has put on $42 billion; and Jeff Bezos, at the top of the hill.  For all the suffering the country has been through, all the trillions in new spending and trillions more in money printing, Jeff Bezos’ net worth has increased by $76 billion during this time of sorrow.  He is now worth $189 billion.

How did it happen that the government stepped in supposedly to help the regular people out, and they got poorer, while the ultra-rich got richer?

We’ll only tease you with the short answer, which is that fiat money is fat for the cronies.  Always has been, always will be.  And the central bank is the delivery system, the very heart that pumps the money their way.

Now, it is true that all of this will eventually bankrupt the country, but the vampire squid cronies are too busy jamming their blood funnels into anything that smells like money to much care about what happens next.

The Genius of Warren Buffet 

Buffett is a brilliant investor.  But he is also a crony capitalist.  His political devotion is to the functionaries that put money in his pocket.  In the Great Recession, his company might have suffered staggering losses in its holdings of Goldman Sachs, Wells Fargo, Bank of America, and General Electric, but Uncle Sam helped them out, even as 10 million Americans lost their homes.  Were it not for the Bernanke-Bush Bailouts, Buffett said, he wouldn’t have bought into the troubled Goldman Sachs.  

Now, something new seems to have dawned on the Oracle of Omaha.  He has apparently taken notice of the corner into which the Federal Reserve has painted itself.  The Fed has long taken on the role of the guarantor of the stock market and the net worth of billionaire cronies.  But it can’t keep printing money to support stocks with low rates without eventually tanking the dollar.

This is not a mystery.  Most of the people who buy gold know perfectly well that money printing does not create more wealth.  Money printing eventually cannibalizes itself, eating away at the value of the currency.  

So, for all his past hostility to gold, Buffett’s Berkshire Hathaway has purchased $563 million in shares of Barrick Gold, the world’s second-largest gold miner.

The Foresight of Howard Buffett

Warren Buffett’s father, Howard Buffett, was a congressman from Omaha in the 40s and 50s.  He was the kind of elected official we desperately need today.  He understood the centrality of gold to a free and prosperous people.  He knew how paper money experiments end.  He was outspoken about it.  He knew the importance of people owning physical gold.

Howard Buffett passed away in 1964.  

Warren Buffett is 89 years old.  He’ll be 90 at the end of this month.  He apparently sees that central banks have lost control.  If he keeps his wits about him, Warren will soon realize that he should be buying physical gold.

It’s funny how the older Warren gets, the smarter his old dad appears.