Gold Gets Dug Out of the Ground; Then We Melt It Down, Dig Another Hole, Bury It Again

Warren Buffett? Frank Fellinger? Apocryphal? Anonymous?

Dear Quote Investigator: The funniest and most perceptive comment about the precious metal gold is attributed to the super-investor Warren Buffett:

Gold gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Did Buffett really say this?

Quote Investigator: The earliest evidence known to QI of this quotation in a major newspaper was printed in The Times of London in July 2003: ¹

Warren Buffett, the renowned investor, famously dismissed gold in a speech given at Harvard in 1998. He said: “It gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

The five year gap between 1998 and 2003 weakens the probative value of this citation. QI has not yet located a transcript of the supposed 1998 speech. A statement from Buffett himself on this topic would be desirable.

So, QI reached out to the accomplished financial journalist Jason Zweig of the Wall Street Journal who contacted the personal assistant of Warren Buffett with an enquiry about the quotation. The assistant conferred with Buffett and sent the following reply: ²

I double-checked this with Warren. He never writes out prepared speeches. But he has said things like this in the past.

This statement supported the attribution and corroborated multiple citations that name Buffett as originator of the expression; however, the answer was still not definitive. A cite with a date closer to 1998 giving more details of the speech would be welcomed by QI.

Pronouncements about gold and silver that conform to this theme have a very long history. In 1877 a newspaper in Galveston, Texas wrote about the “The Monetary Problem” using similar vocabulary and tropes. Remarkably, this passage from more than 135 years ago also included a puzzled alien creature: ³

Look at the actual history of our metallic money; see at what great cost we procure it from its ores, coin it, pass it from hand to hand, finally to bury it again in the vault of some bank. The dust of centuries rests upon coin laid away in the Bank of England. A hundred millions are now buried under the Treasury building in Washington, and probably ever will be together with much more, for should the government ever accumulate enough to offer to redeem the greenback at par, nobody would present the greenbacks for redemption. The paper, being the more convenient money, would be kept and the gold and silver left to slumber where we have been at such pains to store it.

If a being from another world should come among us to study our habits, how he would be puzzled as he saw us with infinite labor obtain from deep in the earth a shining substance, zealously guard it to an establishment where it was cut into small pieces, and then hide the pieces where they could be neither seen nor touched; occasionally he would observe an expression of fear and anxiety upon our faces, we would rush wildly about, drag out our precious pieces and hide them elsewhere, and yet drag them out again and yet hide them elsewhere.

Thanks to top researcher Suzanne Watkins who found the marvelous citation above.

Here are additional selected citations in chronological order.

In 1885 a newspaper in Harrisburg, Pennsylvania printed a short humorous note about transferring silver from one location to another: ⁴

It seems to be a foolish piece of business to dig the silver out of the ground only to bury it again in the vaults of the Treasury.

In 1931 the famous science fiction writer and activist H. G. Wells wrote about gold being extracted from mines and then buried again in treasuries: ⁵

In 1931 mankind was getting gold out of mines in South Africa and elsewhere in order to bury it again in treasuries—and to no other perceptible end. It seems a pity to spend all the labour of mining and transport on such an operation.

In 1933 the Cleveland Plain Dealer of Cleveland, Ohio printed a message from a representative of the Brotherhood of Railroad Trainman. The following excerpt mentioned reburying gold and guarding it, two points of similarity with the quotation credited to Buffett: ⁶

Notwithstanding all the ‘value’ attached to gold by the writers of these articles, they can think of no more valuable employment of human effort than to dig this soft and comparatively useless metal from the ground, only to bury it again in the ground and place guards over it to assure its undisturbed interment, save as the selfish few who control our gold and money supply desire to enter into its shrine.

When the Gold Bullion Depository at Fort Knox, Kentucky was constructed some remarks about reburying gold began mentioning the facility, e.g., the following statement in an Omaha, Nebraska newspaper in 1936: ⁷

Cynic wants to know what’s the use of digging gold out of the ground, just so Uncle Sam can bury it again in the new strongbox in Kentucky.

In 1949 the Chicago Tribune printed a similar statement and ascribed the words to a person named Frank Fellinger: ⁸

Has any one ever figured out why they dig a hole in the ground to get out the gold and then dig another hole in the ground at Fort Knox to bury it?—Frank Fellinger.

In 1952 a newspaper in Ottawa, Canada published a letter that credited a gold miner with a thematically related remark: ⁹

In 1937 a gold miner, wet with slime at the end of a tough shift underground, told me this—”Look here, I’m getting out of this business right now. It just doesn’t make sense to slave year in and year out and kill a few men to dig up this dirty stuff that someone else is going to dig another hole to bury.”

In 1979 a Palm Beach, Florida newspaper published a column musing on the topic: ¹⁰

“You see, we dig up gold and issue paper money, then we bury the gold again, at Fort Knox. And … hm. Why do we do that?”
“Don’t you know either?”

In March 2003 an article ascribed to Stewart Bailey and the Mineweb.com website was posted to the Usenet discussion system. The message contained the quotation attributed to Warren Buffett: ¹¹

Smith says Buffett may well have changed his mind on the merits of bullion, which the market sage famously shunned in a speech given at Harvard in 1998. “It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head,” Buffet said in his speech.

In July 2003 the quote credited to Buffett was published in The Times of London as noted near the beginning of this article.

In conclusion, there is some evidence that Warren Buffett did make the comment under investigation in 1998. But, oddly, the first supporting citations located by QI are dated 2003. Perhaps a reader will be able to point QI to stronger evidence. There is another piece of positive evidence. The assistant to Buffett conferred with him and stated: “he has said things like this in the past.”

Thematically comparable remarks have a long history. An entertaining instance was printed in 1877.

Image Notes: Illustration of gold bars from PublicDomainPictures at Pixabay. Image has been cropped

(Great thanks to journalist Jason Zweig, Warren Buffett, and his assistant. Special thanks to Suzanne Watkins for the 1877 cite, John Cowan for a valuable comment, and Project Wombat.)