This is Why Warren Buffett Sold Wells Fargo, JPMorgan, and Goldman stakes And is Buying Gold!
The big news in the monetary metals these days is that Warren Buffett, the chairman, and CEO of Berkshire Hathaway and famed disliker of gold, sold bank stocks to buy gold mining shares. Buffett just acquired nearly 21 million shares of Barrick Gold worth $563 million. Barrick is one of the primary precious metals producing companies of the planet.
Warren Buffett has always said gold is a bad investment, a shiny cube that does not generate earnings or pay a dividend like a stock, or interest like a bond. Buffett also dumped most of his Goldman stake and trimmed his JPMorgan and Wells Fargo holdings.
Buffett massively unloading bank stocks is consonant with an expectation of inflation, which is what gold is usually a bet on.
Never forget, Buffett plays the long game. And the long-term fate of Barrick is tied to the performance of gold.
Mr. Buffett saw a rare opportunity. The Federal Government cannot afford to have the rate of Inflation rise. Therefore, they must do everything in their power to keep the rate low. Printing more Dollars is a necessary strategy. Plus, there’s added pressure to control the deficit. Increasing inflation forces them to increase interest rates, thus increasing the amount of our Debt.
For Mr. Buffett, this is a golden opportunity.
Besides cutting his position in Goldman and JPMorgan, Buffett also liquidated his stakes in Travelers and Phillips 66, a tiny stub of a holding that had been valued at more than $25 million at the end of the year.
Separately, Buffett also trimmed his positions in Davita, Verisign, Amazon, GM, and several other companies.
Warren Buffett has long been critical of gold as an investment, saying that it has no utility, that you can’t eat gold, it just sets there. And that the magical metal is no match for American mettle. He once wrote, Anyone watching from Mars would be scratching their head over how we treat the shiny stuff on this planet.
Buffett dumping banks and buying Barrick Gold is a sea-change. The importance cannot be overstated. He sees global central banks have completely lost control; they’re printing trillions and Killing fiat money. The entire $100 trillion global funds biz just got turned on its head, Max Keiser tweeted.
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