GOLD THOUGHTS
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
December 4, 2007

The business media keeps telling investors to remain faithful. Paper equities, despite their continuing under performance, are they claim the place to put your wealth. A broken clock is right twice a day, and that seems to beat the record of most of gurus appearing in the business media. We are repeatedly told that the market is just shy of a high, making a high, or consolidating gains. What is important though is not the level of market or the price of an investment. What is important is what it will buy. In th e chart, using blue circles, is plotted the DJIA for this year. Yes, a gain is being recorded. However, more telling is the red line which is the DJIA adjusted for the loss of value of the dollar. It shows what the DJIA will buy in the big world. When adjusted for the loss of purchasing power by the dollar, the DJIA is no higher than at the beginning of the year. The monetary illusion of rising nominal dollars masks the loss of value in what the DJIA will buy in world markets.

Gold has clearly done far better at maintaining purchasing power. No doubt all have been excited by Gold's rise to over $800. Now, Gold is in process of a much needed correction. Such events are necessary to develop the fuel for the next rally. Investors now have important Gold questions. How far will correction go? Will it break $700? When will an over sold condition develop to entice investors to buy? When should buyers step up? With U.S. dollar on way out as principal global money, owning Gold in more important than ever. The long-term case for Gold has been confirmed by the response of global financial markets to structural ineptness at the Federal Reserve. No longer are forecasts for $1,400 ridiculed. All that remains is selecting the best times to buy Gold.

© 2007 Ned W. Schmidt
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Ned W. Schmidt,CFA,CEBS is publisher of THE VALUE VIEW GOLD REPORT. That report now includes a weekly message, TRADING THOUGHTS, to help investors identify timely points for buying Gold and Silver. His monumental report, "$1,265 GOLD", with 255 pages and 98 graphs, is now widely known, and is available at www.amazon.com or from the author by clicking HERE This work has now been read by investors in over twelve countries around the world. Ned welcomes your comments and questions. His mission in life is to rescue investors from the abyss of financial assets and the coming collapse of the U.S. dollar. He can be contacted by Email.

Please remember that no method is perfect nor is the one running the model.
All estimated returns are for the model portfolio and do not reflect those earned on actual portfolios.