April 18, 2013

BUT WOULDN'T WE RATHER HAVE DRAGONS?:

Don't Believe the Hype--House Tyrell Is Richer Than House Lannister (Matthew Yglesias, April 17, 2013, Slate)

[J]ust consider this observation from Warren Buffett in last year's letter to Berkshire Hathaway shareholders:

Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce - gold's price as I write this - its value would be $9.6 trillion. Call this cube pile A.

Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Today all that gold would be worth only about $7 trillion so we can just say would you rather have a 68 cubic feet of gold, or all the cropland in the United States plus thirteen ExxonMobiles. The answer is, obviously, that you take the farms and the oil.

And in Westeros, the Lannisters have the cube of gold and the Tyrells with the rich farmland of the Reach have the real resources

Posted by at April 18, 2013 5:36 AM
  

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