GOLD THOUGHTS
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
January 1, 2008

GOLD WINS! PAPER EQUITIES LOSE! The headlines for investing in 2007, and the previous ten years, can now be written. Forget all the other drivel about what happened in the markets in 2007. Gold won! That's all you really need to know. Gold beat paper equities for the one year, for the five years, and for the past ten years. Absolutely no way purveyors of paper equities can paper over their miserable performance. And, those performance numbers for paper equities are before FEES! Can you imagine having the audacity to charge some gullible investor a fee for last year's paper equity performance? Who could charge an investor a fee for producing the miserable returns of paper equities over the past ten years? Have they no conscience? Investors would have better off putting a few Gold coins in the drawer, and watching Simpson reruns rather than the cable business shows. Just shameful!

But, we have more good news. Federal Reserve, and other central banks, still exist. Having created great stock market bubble that ended in 2000, they went on to create the great mortgage market bubble that ended in 2007. As a consequence of this long stretch of brilliance, the banking and finance sector, at least in the U.S., is now in shambles, and being sold off to foreign investors. As we write, liquidation of the wealth of the Baby Boom is beginning. Now eligible for retirement they will turn to their national retirement systems, only to find them filled with government debt. To whom will that debt be sold to pay retirement benefits? Baby Boomers may want to sell their homes to enjoy retirement. But, to whom and for what prices? If we did not have Gold, we would invent it. While governments are what will make Gold worth more than $1,400, today's price may be over bought. Buy low, don't buy high!

© 2008 Ned W. Schmidt
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GOLD THOUGHTS are from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report, monthly, and Trading Thoughts, weekly. For a subscription, click here.