Famed billionaire investor Warren Buffett warned investors of the dangers associated with gold and bonds in his recent annual letter to shareholders.

The Chairman of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) said that he considered gold to be a member of an asset class that never produced anything of value and that "if you own one ounce of gold for an eternity, you will still own one ounce at its end."

While critics of Warren Buffett's investment strategy like Jim Cramer have questioned Buffett's aversion to gold during a time that the commodity has seen its value climb ever higher, Buffett criticized them for investing in an asset that is "neither of much use nor procreative."

Buffett said that gold investors were mostly motivated by a fear of of almost all other assets and a belief that the number of investors who shared their fears would grow. He said that the rising price of gold attracted investors who saw the rising price as a validation of the gold enthusiasts' investment thesis.

Buffett went on to warn that gold's “bandwagon” investors were in danger of creating another investment bubble, saying that "over the past 15 years, both Internet stocks and houses have demonstrated the ...