Warren Buffett famously avoids investing in precious metals. His reasoning is simple: gold and silver just sit there. They don’t produce cash flow. They don’t make things. They don’t innovate. In his eyes, owning precious metals is a kind of speculation—betting that others will pay more for it later. Meanwhile, he’d rather own businesses that produce value.
It’s hard to argue with that logic… if you trust the system.
Buffett does. He trusts in fiat currency, and more specifically, in the ongoing global dominance of the U.S. dollar. His investing worldview assumes that the dollar will remain the world’s reserve currency and that the American economy will continue to grow, innovate, and remain stable over the long haul.
I bring up Buffett because like him or hate him, he is the most successful investor in the world and has consistently beat the market almost every year of his life, so his opinion does matter. We should at least consider what he says when he says it.
But in this case... what if you don’t have the same trust for fiat that he does?
What if you see cracks forming in the foundation—massive debt, endless money printing, political dysfunction, geopolitical realignment, and a growing sense that the global order is shifting? What if you worry that simply holding stocks in “diversified” companies might not be enough to shield you from systemic collapse or runaway inflation?
That’s where gold and silver come in. You guys just knew I was going here, didn't you?
Precious metals are not investments in the traditional sense: they’re stores of value. Anchors. Historical insurance. They don’t earn you dividends, but they don’t go bankrupt either. They’ve served as money for thousands of years, long before anyone trusted a government IOU or an ETF. When currencies fail or confidence breaks, people fall back on metal. And this kind of failure happens more often than we might hope. See my post from two weeks ago for some examples of this.
So why hold silver and gold?
Because it depends on what you trust.
- If you trust the dollar, buy stocks.
- If you think the dollar might eventually crack, hold metals.
- And, just for shits and giggles, if you think the future is digital and decentralized, buy Bitcoin. Ok, BTC isn't a part of the comparison given in this post, but c'mon, we all love Bitcoin.
In the end, it’s not about choosing one over the others, it’s about understanding what risks you’re hedging against. I actually don't hold any gold. But it's on my list of things to buy. I do however hold a lot of silver. I hold silver not because I expect it to shoot up in value, but because I don’t want to be left holding a bag of worthless paper if the music stops. I honestly don't know if I expect that. I kind of don't. As bad as the dollar is looking right now, I don't think it's going anywhere. But I also am hedging my bets here.
And maybe—just maybe—I want to hold something that’s real. Something I can touch. Something that doesn’t require electricity or a password to prove it’s mine. There is something almost magical to holding a silver coin or bar in your hands.
What do you think? Are precious metals still relevant in a digital age? Or is gold just a shiny relic?
