Howard and Warren Buffett on gold

Mar 6, 2012·James Turk

Sons often rebel against their fathers, but what accounts for the difference between Howard Buffett’s view of gold, and that of his son – the famed investor Warren Buffett?

While the latter is famous for his disparaging remarks about gold, his father Howard – who represented the Omaha district of Nebraska for four terms as a Republican congressman in the 1940s and 50s – thought human freedom was closely linked to the ability of a citizen to redeem currency for gold.

In a new essay, James Turk examines the differing attitudes of these two men towards the yellow metal, and looks at what this says about their attitudes towards money generally. Central to this is James’s analysis of what he calls the “modernist” view of money, or the idea – expounded by Warren Buffett – that governments determine the ultimate value of money.

In James’s words: “This modernist view of money ignores that market forces, which a government can influence but in the end cannot control, inevitably determine the value of any asset. With repeated interventions in the market process, governments disregard this basic principle, causing disruptions to the market process that impede economic activity and even worse, can distort money itself.”

For more on the philosophical differences between the Buffetts, go to the "A Perspective on Money from Howard and Warren Buffett" by James Turk.

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