Buffett agrees that holding cash is a path to the poor-house. In fact, he says they may be “thought of as “safe”. In truth they are among the most dangerous of assets.”
While the nominal dollar value of your investment may be protected, the purchasing power of that cash is being eaten away while it sits there. To cement the point, Buffett remarks that the US dollar has fallen in value by 86 per cent since 1965, due to just that phenomenon.
Read more: http://www.watoday.com.au/business/motley-fool/why-buffett-is-cold-on-gold-20120214-1t3vk.html#ixzz1mUxb7FEt
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