news.goldseek.com >> 7 May 2008
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news.goldseek.com >> 7 May 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
The wheat price has broken. Rice price has a short-term top. Corn may be topping out. Gold is down. Silver has taken a dive. Housing prices are in the middle of decade long bear market. Yet, oil futures continue to move higher, fueled by margin led speculation.
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news.goldseek.com >> 23 April 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
The U.S. Federal Reserve has forgotten the most essential rule. They should first do no harm. In a rush to bailout the bankers from their self inflicted mortgage mess, the Federal Reserve has seriously distorted the U.S. monetary system.
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news.goldseek.com >> 9 April 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Two sets of forces work on market prices. Internal factors, or market's technical conditions, can in some periods dominate all others. The second set of forces are fundamental factors. The latter is that which is happening in the world that might influence the market. The much enjoyed rally from last summer's lows to the joyous move above US$1,000 was driven by latter.
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news.goldseek.com >> 26 March 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Effectiveness of a central bank can be measured several ways. For investors, that assessment is by return provided by equity capital in a nation and value of the nation's money. This week's chart shows that Federal Reserve deserves a failing grade.
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news.goldseek.com >> 12 March 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
The acceleration of Gold's rise, as shown in this week's chart, has brought smiles to faces of many and greed to the hearts of others. Again, a parabolic move with accelerating slope in a market is a yellow flag, not a sign of encouragement. What might cause the break in Gold's parabolic rise?
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news.goldseek.com >> 27 February 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
This wonderful rally in Gold, largely driven by money chasing momentum, is generating a great deal of bravado. Coming sale of a significant amount of Gold by the IMF is scoffed at. Why all of a sudden did the G-7 agree to it? Is more to come?
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news.goldseek.com >> 13 February 2008 |
Gold Thoughts for 13 February 2008
By: Ned W. Schmidt,CFA,CEBS
A group of economists at the IMF want to sell Gold to buy debt paper in order to earn interest income to pay the salaries of a bunch of economists asleep at their desks. Such is not the kind of thinking that makes market tops. Sounds more the thinking that went into the Bank of England sales in 1999.
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news.goldseek.com >> 30 January 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Pleased to announce that votes are in. Ineptness Award for first century of Federal Reserve's existence goes to Bailout Bernanke and his Buckaroos. Last week's interest rate cut cinched it for them.
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news.goldseek.com >> 16 January 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Gold's explosive start of year move has been enjoyed by all. Has it been over enjoyed? Fundamentals of the U.S. dollar did not suddenly get worse on the first day of the year. Current euphoria in the Gold market may have been over done.
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news.goldseek.com >> 2 January 2008 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
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.
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news.goldseek.com >> 19 December 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
Can the financial system be in as big a mess as central banks' actions suggest? Year end is rapidly approaching, and accounting convention calls for all to strike balance sheets. Those financial statements influence the evaluations of firms by investors, regulators, and rating agencies.
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news.goldseek.com >> 5 December 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
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.
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news.goldseek.com >> 21 November 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
So, OPEC finally figured out what the western world has been doing to them. Oil producers have been swapping oil for green pieces of paper. Suddenly, they discovered the intrinsic value of those green pieces of paper, the market value of the paper and ink. Only governments can take paper, cover it with ink, and make it worthless.
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news.goldseek.com >> 7 November 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
As this week's chart portrays, Gold has provided a far higher return than U.S. paper equities. Am really starting to feel some sorrow for those that have been duped by Street and business media into keeping their wealth mired in paper equities.
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news.goldseek.com >> 24 October 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Twiddle Dee and Twiddle Dumb, one at Federal Reserve and other at U.S. Treasury, continue to focus on saving banks from their rather stupid creation of SIVs. Fine if families are thrown out of homes, investment bankers must be rescued. Proper economic response would be to let some of those banks fail! Due to this ineptness, dollar has plummeted and Gold has risen.
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news.goldseek.com >> 10 October 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
Economic collusion? Bailout Ben Bernanke needed some help before September meeting on U.S. interest rates. He needed economic numbers to justify an interest rate cut intended to bailout the banks. U.S. Department of Labor(DOL) apparently was quite willing to aid the FOMC.
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news.goldseek.com >> 26 September 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Bailout Ben Bernanke, Chairman of U.S. Federal Reserve, last week demonstrated the intellectual bankruptcy at that institution. No broad based economic need for a 50 basis point interest rate cut was evident. Only purpose of rate cut was to aid investment banks and mortgage brokers. Further, that interest rate cut is now politically impossible to reverse without a crisis in the value of U.S. dollar.
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news.goldseek.com >> 12 September 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
U.S. trade deficit on goods and services for last month was reported as $59 billion. For another month $59+ billion of green paper was exported by the U.S. During same period central banks reduced their holdings of U.S. debt by $30+ billion. Those values, when taken together, mean that around the world $90 billion of green paper was sold, or not not bought, by central banks. Little wonder U.S. dollar has rediscovered downward path and Gold has risen.
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news.goldseek.com >> 29 August 2007 |
Gold Thoughts - August 29, 2007
By: Ned W. Schmidt, CFA, CEBS
The question seems to have changed. No longer does the question deal with whether or not U.S. housing market has bottomed. It has not. Now the question is far different. The depth of the U.S. mortgage market collapse is the question.
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news.goldseek.com >> 22 August 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Collapse of U.S. mortgage market has burned many foreign investors They most likely will be forced to become net sellers of U.S. dollar debt. Dollar's structural bear market will continue as foreign investors shun and sell dollar debt. Gold is the only true refuge in such an environment.
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news.goldseek.com >> 15 August 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Complete and total intellectual bankruptcy of Federal Reserve was confirmed this past week. Creation and collapse of two financial bubbles in eight years would seem to suggest monetary philosophy of Federal Reserve is fatally flawed. Core rate of inflation as a tool for managing monetary policy should be declared dead, and buried in history books of foolish thinking. The entire time the Federal Reserve was driving interest rates to 1% we were told all was well because core inflation was tame.
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news.goldseek.com >> 8 August 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
As U.S. mortgage market infrastructure continues in collapse, era of paper assets is fading into history. Last week's chart showed that Gold has provided higher returns than paper assets over past ten years. Today's graph places situation in a longer term perspective. Era of real assets, personified by Gold, is early in a cyclical upswing. Good part is yet to come. Plotted is ratio of US$Gold to S&P 500.
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news.goldseek.com >> 5 August 2007 |
Trading Thoughts
By: Ned W. Schmidt,CFA,CEBS
On Friday, the markets took control of the markets. The Federal Reserve lost control of the financial markets that day. When you woke on Friday, the 30 year fixed rate mortgage, assuming you could qualify, was at 6.7/8%. At lunch time, that rate was at 8%. In the afternoon, they began executing the remaining live part of the U.S. housing market. The markets are ignoring the Fed.
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news.goldseek.com >> 1 August 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
WE WIN! This week's chart is of ten year returns on $Gold(7.4% compounded annually) and U.S. paper equities(6.1% total return compounded annually). As the chart shows, the place to have had your money for past ten years has been Gold.
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news.goldseek.com >> 25 July 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
Global investors took one look at unraveling of U.S. debt delusion, and took their toys home. The U.S. dollar plummeted to new lows versus most major national monies. That selling has dollar now over sold and due for a rally against some, with perhaps exception of yen. $Gold has rallied, and is over bought. $690 may scare off some buyers in short-term due to over bought condition.
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news.goldseek.com >> 11 July 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Good news just keeps rolling in. Aircraft carrier Enterprise off on summer cruise to Middle East. Horton has collapsing home sales. S&P and Moody's analysts awake from naps to reconsider ratings on some CDOs. Ten year rate of inflation in U.S. at highest level since 2002. Oil prices moving up. Radical Islamic groups in effort to take control of Pakistan, and its nukes. Israeli general warns time may be running out on halting Iranian nuclear weapon program. Euro climbs atop dollar while British pound at 25+ year high against dollar. Why would anyone want to own Gold in such an environment?
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news.goldseek.com >> 4 July 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
The U.S. has had no net growth in manufacturing employment since the 1950s. Fantasy aside, the principal export of the U.S. is green dollars. With green dollars being the major export, the value of those dollars can only go down. With no visible end to the exportation of green dollars, the price of Gold has little choice but to rise over time. Fantasies are the only arguments for allowing your wealth to wither in paper assets. Reality is real assets, like Gold.
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news.goldseek.com >> 27 June 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Investors around the world are watching these financial shenanigans, and are selling dollar. Dollar is rolling over, as shown in chart, moving on to a path for a new low. Waning confidence in hedge fund management will exacerbate the situation. British pound at $2 says a lot about confidence U.S.$. Downward slide for dollar means intrinsic value of $Gold is rising. Tuesday, NYC funds pushed up U.S. stock market and sold off Gold and Silver in a sure sign of emotional and financial denial.
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news.goldseek.com >> 20 June 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Can double digit inflation exist in the headline number and “core” inflation remain muted? Does the cost of energy and food influence the cost structure of the world? Will China suddenly quit importing oil and food, causing prices to fall? Will the real world ever become known to the statistically challenged individuals creating government estimates of inflation? Those are questions that investors need to answer.
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news.goldseek.com >> 13 June 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Reality can truly be a shocking experience. For more than a year, paper equity markets have been deluded into thinking interest rates would decline. Suddenly, looking around the world the discovery was made that interest rates in most countries were rising or were going to rise. Decades ago, the U.S. set domestic interest rates. Today, interest rates are controlled by global investors.
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news.goldseek.com >> 30 May 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA, CEBS
Investing in paper equities has apparently become far easier. Either a stock will be taken private by a speculative investment fund or it will be purchased with money from China's foreign currency reserves. Investment gains have rarely been so assured. Not since internet stock bubble or Florida condo mania have investors faced such odds of winning. Combine those odds with a Federal Reserve dwelling in the la la land of core inflation creates a near perfect story for placing wealth into paper equities. How can it go wrong this time?
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news.goldseek.com >> 16 May 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Only the truly deluded believe that the core consumer price index released for the U.S. on Tuesday has any true meaning. Only those trying to rationalize the continuation of the hedge fund bubble in U.S. financial markets give it any consideration. The core CPI is the “WMD” of the Federal Reserve's inflation commitment.
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news.goldseek.com >> 9 May 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Complacency over the demise of the U.S. dollar has allowed continued expansion of the yen and Swiss carry trade loans. Likewise, the imminent U.S. recession is being glossed over. This week the FOMC will confirm the ineptness of U.S. monetary policy by doing and saying either something or nothing, which may or may not be interpreted positively by some. With this background, speculative funds have pushed paper equities higher. In doing so multiple buying opportunities have been created in the Gold and Silver markets.
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news.goldseek.com >> 25 April 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
How much has Gold benefited from the carry trade loans? How much of the run from US$640 to US$690 has been fueled by the same borrowed money that has pushed paper equities higher? Is Gold vulnerable when the carry trade loans are forced to unwind? How much price vulnerability might occur? These are the questions being mulled by serious investors in Gold. Unfortunately, these same questions as they apply to paper equities are being largely ignored.
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news.goldseek.com >> 18 April 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Much talk about this index or that index making a new high, or near a new high. The level for an index is interesting, but the return being earned is more important. A stock market index could conceivably make a new high each and every day without providing a desirable return. Today's graph compares the return over the past five years of an investment in $Gold and U.S. stocks, as measured by the total return on the S&P 500.
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news.goldseek.com >> 28 March 2007 |
Moneyization #37
By: Ned W. Schmidt,CFA,CEBS
To the joy of day traders, the Federal Reserve Open Market Committee, the rate setting arm of U.S. Federal Reserve, announced again their lack of commitment to sound money. For a day U.S. equity markets were filled with joy and short covering. FOMC statement, released after their meeting, suggested diligence on inflation(wink, wink), and suggested some concern for weakening U.S. economy. Easier U.S. monetary policy may require just one more indication of the collapsing U.S. housing industry and could be only one committee vote away.
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news.goldseek.com >> 21 March 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
As we recently reported to our readers, Gold, Silver and Gold stocks gave a number of important buy signals in the last week or so. Since then, prices have moved higher. If your portfolio or 401-k is void of these investments, early retirement is not likely in your future. On price weakness, add Gold, Silver and GDX to your portfolio. In any event, diversification is always a positive.
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news.goldseek.com >> 14 March 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Gold is a unique investment. It has no balance sheet. It has no earnings estimates. It is the only investment that is a true asset, neither a debt nor residual ownership. Such is the reason that central banks around the world, from beginning of time, have held Gold. Know any central banks that prefer to hold sub prime mortgages rather than Gold? Know any Roman mortgage broker stocks?
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news.goldseek.com >> 7 March 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
On Tuesday equity markets began a demonstration of long known fact, even a dead cat bounces when thrown into the air. Market corrections can certainly include days of temporary relief. A possible end to the correction is being called by some. More likely it is a bear market trap.
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news.goldseek.com >> 28 February 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Are U.S. paper equity markets facing the beginning of end? Tuesday's break below 118 confirms the view that Japanese yen has turned, meaning last chapter for carry trade has started. Collapse of Chinese markets caused risk management systems sirens to wail. Reducing risk became Tuesday's goal, and selling hit all markets.
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news.goldseek.com >> 21 February 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Street is now into forecasting weather, selling off oil. Somehow and someway this action is connected to the price of Gold. No one knows how, but that is the accepted thinking. Street is the only part of the globe that is bearish on Gold. Given that Gold's five year returns exceed that of most investment managers perhaps their attitude is reasonable. One would not want customers to discover they could do better in Gold, and not have to pay management fees.
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news.goldseek.com >> 14 February 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Gold investors thank HSBC, the global bank. $Gold had been making time, unwinding an over bought condition. Last week, HSBC announced its loan loss provision for 2006 will top $10 billion, 20% more than previously expected, because of mounting losses on U.S. mortgages. Markets recognized this as only first of blood letting to be done at financial institutions involved in U.S. Mortgage Mania.
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news.goldseek.com >> 7 February 2007 |
Gold Thoughts
By: Ned W. Schmidt, CFA,CEBS
Gold is the one universal money, even more so than the dollar ever was. Massive trade deficit of United States is spewing out of vast quantities of green paper onto the world's markets. That action can only cause the global purchasing power of U.S. dollar to further depreciate over time. Investors around continue to swap those green pieces of paper for Gold. They have no choice. Supply of green dollars is growing faster than the global pile of shiny Gold. In that situation the only possibility is for the price of Gold to rise in dollar terms.
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news.goldseek.com >> 31 January 2007 |
Gold Thoughts
By: Ned W. Schmidt,CFA,CEBS
Globally, investors understand their choices of money are Gold, the Euro, the U.S. dollar, the Chinese renminbi, and all the others. The U.S. dollar is losing leadership as Bernanke's monetary alchemy lacks any limitation on the creation of dollar. Without a constraint on supply, the price of the dollar will fall, as is the case with any commodity or good. Any hint by the FOMC that lower U.S. interest rates are a possibility in the short-term will accelerate the shift, pushing down the value of the dollar and moving $Gold's price up.
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news.goldseek.com >> 9 January 2007 |
Moneyization #35
By: Ned W. Schmidt,CFA,CEBS
Gold again served investors well in the previous year. As the first chart show, $Gold has for the second year in a row provided a return superior to U.S. paper equities. Results for 2006 extend the excellent record of performance being built by $Gold, and the best is yet to come. For five of the past seven years and six of the last ten, $Gold has outperformed U.S. paper equities. Guess that is what they mean by a “real” return. One would think that the paper asset groupies would soon be embarrassed talking in public and in the media about paper assets, given their inferior returns.