I'm not an economist. But here is my arm-chair philosophizing about what is happening. To combat the economic crisis we started printing a lot of money. This had two effects: the interest on savings went way down, and the loans became very cheap. Having money = bad, having debts = good, at least for those who can carry the burden. This was done in order to incentivize investing, thus growing the economy. Obviously, that worked: property price and valuations went way up. But those are driven by the future-promise of debt repayment. The moment we stop printing the money, people will get wise and try to sell off those assets again. Because then having money is cheaper than having debt. So now there's a bit of problem: we can't keep printing money faster than the economy grows due to hyperinflation, but we can't /really/ stop doing so either because people will sell off their debts in order to cash in on cheap investments. This to me, seems problematic.

Ah, thanks for that explanation! I wasn't aware of what the hedge part meant. But now I could connect it to an idea.

How is market overvaluation calculated? And is public debt an absolute measure or is it relative to another indicator?

coupled with Alan Greenspan's promotion of home ownership which eventually led to the subprime collapse

Capital gains tax was raised in late 80’s and 90’s.

Such as the Indian dowry jewelry industry.

All other industrial uses are completely swamped by the creation of human ornamentation. But the thing about jewelry is that the gold in it is usually very easily recycled. So it is not as strongly consumed as the gold used in electronics, which requires a greater effort to recover, if it isn't simply landfilled a milligram at a time.

That jewelry use creates a soft reserve, such that it is usually not available to the market, but if the gold price rises high enough, it can start to liquidate, likely starting with the ugliest necklaces.

So it would seem that the majority of the value of gold comes from the human desire to possess a tangible, portable symbol of one's wealth. It cannot be taken from you, unless someone finds you and pries it out of your fingers. Paper assets are more amenable to remote interference. Your ownership of a company via stocks may be diluted. Your fiat accounts may be devalued via monetary inflation or seized with the cooperation of your bank. Your bonds may suffer default. The title to your land may be transferred against your will. But that gold necklace is yours, as long as you're the only one that knows where it is.

As such, failing to invest in gold is ignoring the risk of a major crash in the modern centrally-banked, fractional-reserved, and fiat-moneyed economy, which is subject to boom-bust cycles. Gold is the asset of choice for those that think that government bonds from too-big-to-fail countries are not actually the default lowest-risk investment. But even then, the gold bugs are undercut by the people who buy condos in underground shelters that anticipate the complete collapse of human civilization, along with barrels filled with small arms ammunition. Buffett's #3, #5, and #6--gold is going long on fear--is definitely true.

But I don't think the other quotes are 100% accurate. They have the odor of the Labor Theory of Value about them. Things don't have value because they do stuff, but because people want them. Gold has value because some people want gold, not because it delivers billions of bottles of Coke, or ferries passengers across continents, or summons a driver for you on command. People want gold for different reasons, and some reasons are more predictable than others, but none of those reasons are required to be rational or useful. And that's why the Buffett analysis of gold fails, in my opinion.