Warren Buffet getting into Gold & Silver?

As the most influential investor in the world, Warren Buffet can't advocate gold or directly invest in it because it could literally cause a run on the dollar. So how can he invest in gold and silver if he knows they are about to explode?


1. If you wanted to be able to buy huge stockpiles of silver?

What better way than to buy a large solar panel company? (One of the largest users of industrial silver, they use up to 0.1 gram of silver per watt generated.)

January 2nd 2013 "SunPower inks $2.5 billion deal with Buffett utility"

http://www.reuters.com/article/2013/01/02/us-sunpower-berkshirehathaway-idUSBRE9010LA20130102

Construction of the projects, which the companies called the world's largest photovoltaic power development, will begin this quarter and is expected to be completed by the end of 2015.

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Largest in the world, starting this quarter? Gee I guess we're going to have to buy loads of silver for that...

2. If you wanted to be able to buy huge stockpiles of gold?

A little obvious, but because there are few industrial applications for gold what other choice did he have...

January 1st 2013 "Berkshire Hathaway subsidiary acquires NM jewelry supply business"

http://www.bizjournals.com/albuquerque/blog/morning-edition/2013/01/berkshire-hathaway-subsidiary-bell-group.html

Richline Group (a wholly-owned subsidiary of Berkshire Hathaway) President Dave Meleski said Rio Grande would be a standalone business, as are the firm’s recent purchases LeachGarner and Inverness.

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Yes not only did he purchase one of the largest jewelry supply companies in the world Rio Grande, (that buys loads of gold wholesale and advertises to purchase scrap gold) he also purchased LeachGarner last year which also happens to do... exactly the same thing!
http://leachgarner.com/ (This company which was about to close before Buffett bought them now had enough money to purchase findings incorporated on 24th Dec 2012 - another jewelry supply business!)

Buffet through Richline also bough South Africa's largest jewelry manufacturer on Oct 15th 2012
http://www.richlinegroup.com/#


So none of these are retail jewelry companies but they are jewelry supply companies that can buy boat loads of gold directly from the refiners without setting off the alarms!!

(Just put this together this evening after seeing an article on photovoltaic purchases and getting suspicious.)

Anyone else seeing what I'm seeing?

Edit: Just found out that the physical address of the South African Jewelry manufacturer Buffet bought 'Alan Mair Manufacturing Jewelers' just happens to be 'Refinery Road Germiston', yes Buffet just bought a business physcially located at the actual Rand refinery!

Rand refinery http://www.randrefinery.com/

It is one of the world's largest gold refineries. It refines most of Africa's gold

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Since 1920, we have refined nearly 50 000 tons of gold – almost one third of all the gold mined worldwide.

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ah but ........ is he buying boats ? :rotflmbo:

or is he simply filling up his swimming pool ?

Warren Buffett has been, at least publicly, negative on gold in recent years. If he is sneaking into gold via company proxies, that is worth watching. Buffett did not get to be nearly the world's richest man by being a dumbass.

Good catch, Unbeatable!

These two acquisitions of his are small, but if he buys MORE (MOAR?), then that will be another warning bell that supplies of physical PMs may dry up for us shrimps...

LOL, rblong2us!

Ridiculous rumours, Warren Buffet wouldn't be caught dead "investing" in collectables like silver or gold, and there are a lot of excellent reasons for this:

1) Gold & Silver have no yield

2) "Precious" metals are traditions that have been discarded by everyone who isn't an Indian farmer or tin-hat wearing conspiracy theorist

3) There is nothing backing Gold & Silver

4) Collections of Gold & Silver do not create any middle class US jobs.

5) Gold & Silver collections could be rendered instantly worthless by the discovery of a large mineral deposit, or the commercialisation of asteroid mining.

6) Gold & Silver are in a bubble.

7) The amount of Gold & Silver mined from the earths crust is a fraction of 1 percent of the total amount that exists in the earth, both are set for a 99% crash once the rest has been refined into coins and other collectables.

8) Canny US consumers are selling their gold in droves, cashing in at the top of the bubble. A sure sign prices will soon tumble.

9) Central banks have been buying gold in an attempt to hold up prices and delay a crash.

10) Mr Buffet is not a Jew living in 1937 Vienna. If he was, he would be sewing a real asset like derivative contracts based on investment grade securitised debt obligations into his clothes.

11) Hoarding is an obsessive-compulsive activity of the mentally defective.

12) In the 40 years to 2007 Berkshire hathaway has grown at an annual rate of 27.5%. If Mr Buffet had bought collectable coins in 1967, he would still have the same number of coins.

13) Gold & Silver are much sought after by criminals & fraudsters.

14) Gold & silver have the potential to be used in tax evasion & money laundering.

15) Ownership of Gold & Silver is unpatriotic.

Mr Buffet is a genius at identifying undervalued assetts, with Solar power set to take off in a big way, and mommentum gathering in the global economy, these businesses are set to be huge winners in the coming years - by adding real value to very ordinary raw materials.

I think you owe Mr Buffet an appology.

I think the last one I mentioned at Rand Refinery in South Africa is a big one.

Coming from South Africa, I know everyone, everywhere there can be bribed.

Just last year 2 executives at the Rand Refinery were fired because they were making the Krugerrand, one of the most popular one ounce gold coins in the world, underweight. The level of corruption and complicity from management through to key staff to pull that off is quite something.

http://www.timeslive.co.za/local/2012/04/15/krugerrand-scandal-rocks-sa-mint

So with Buffett having purchased a business actually located at one of the largest and most corrupt refineries in the world, I'm sure he has access to many many tons of gold which can be purchased discreetly if needed and ahead of other buyers who may already have had existing contracts if he is willing to pay a little extra on the side.

Unbeatable said:

... they were making the Krugerrand, one of the most popular one ounce gold coins in the world, underweight. ...

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Under "spec", not under weight.

Thanks for the correction PMbug.

The article I referenced states a couple of times that they were underweight, but I see you're right that they were under spec in that the gold content had been watered down which apparently suggests even more than it was intentional according to silverdoctors.

As such, it is likely safe to conclude that this was an intentional skimming operation by the Reserve Bank of South Africa rather than a production glitch.
A national mint producing investment grade gold coins for several months with debased gold is not accidental. Period.

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Unbeatable said:

I think the last one I mentioned at Rand Refinery in South Africa is a big one.

Coming from South Africa, I know everyone, everywhere there can be bribed.

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Man.. Everyone everywhere can be bribed. The idea we live in a law abiding society in the states is a fairy tale.

DSAbug said:

Man.. Everyone everywhere can be bribed. The idea we live in a law abiding society in the states is a fairy tale.

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Oh you old cynic Derek ........

Here in blighty theres not a lot of bribery goes on, as most are smart enough to realise how 'double edged' it is. Once you take your first bribe you are bought and controlled.

No, its more of a back scratching exercise here, golf club favours and a bit of funny handshaking.
All very civilised :rotflmbo:

But to be able to bribe every level to doctor the gold content at the Royal mint would be a very unlikely situation.

We live in a world where Ipads are stolen at your airport security checks. Civilized my arse.

rblong2us said:

But to be able to bribe every level to doctor the gold content at the Royal mint would be a very unlikely situation.

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Well.. "off the books" type of activity is pretty common amongst doctors in the states. Same with Dentists.. Hair dressers.. strippers.. Name a profession and you can find someone operating "unethically". Judges.. Lawyers.. Hell, you have seen the president get bribed at times. Both Bush and Obama engaged in crony capitalism. And don't even get me started on Pelosi..

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16) But, but, it only costs $5.00 to dig it out of the ground!

17) You can't eat gold!

Since I have no health insurance any more, i am a cash patient. I believe i receive much better care as a result. My doctor spends more time and seems more thoughtful now that he doesn't have to pay medical code experts to break out my billing for the insurance company and I'm sure the cash goes right in to his wallet.

This could also be a genius move by Buffet, because what's the bet that when they start gold confiscation that they only target 'greedy people' with 'investment gold' not 'jewelry' - so no matter how much gold Warren Buffet stockpiles in his 'jewelry supply companies' it will be immune from confiscation.

Berkshire Hathaway, 3G Buying Heinz for $72.50 a Share, or $28 Billion

http://www.cnbc.com/id/100442835

Yes because that's the kind of thing you buy when you betting on a recovery

http://www.telegraph.co.uk/finance/...-as-consumers-get-taste-for-comfort-food.html

Desire for cheap comfort foods such as beans on toast as the recession bites has seen Heinz report an 11pc surge in quarterly profits.

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Just like his $34 Billion Dollars investment in Burlington Rail in 2009 was marketed as a 'bet on a recovery'.

Analysts say Buffett is planting both feet in an industry that is poised to grow as the economy gets back on solid ground.

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:rotflmbo: When in reality...

This fuel efficiency allows a train to haul one ton of freight 423 miles on one gallon of diesel. As fuel prices go up, this efficiency will only make rail more competitive to alternative shipping/trucking options.

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This is the real reason, - as the dollar plummets and oil sky rockets people will have to move back to moving most things by train across the country instead of trucks, which though way more convenient can't compete with trains if fuel costs rise and so even in a recession/depression rail profits may actually improve.