Gold doesn't grow, unlike investments in companies

The argument

Warren Buffet put it best. He's one of the richest men in America because he buys productive assets, not gold: “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? Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices. A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond. Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.”

Premises

Counter-arguments

Defenders of gold reply that the 'unproductive' charge misunderstands its role: gold is held as a store of value and a hedge, not a compounding growth asset, and it has preserved purchasing power over very long horizons and risen sharply in crises when equities fall. Buffett's cropland-and-Exxon comparison assumes a benign century for productive assets, whereas gold's appeal is precisely as insurance against currency debasement, inflation and market collapse — scenarios in which 'pile B' can fall hard. Judged as a diversifier rather than a growth engine, they argue, gold has a defensible place, so 'doesn't grow' does not make it 'terrible.'

Rejecting the premises

[Rejecting P1] Gold is held as a store of value and crisis hedge, not a compounding growth asset, so 'it produces nothing' judges it against a purpose it is not meant to serve. [Rejecting C] As a diversifier and inflation hedge that tends to rise when equities fall, gold has a defensible portfolio role, so being unproductive does not make it a 'terrible' investment.