Ned W. Schmidt, CFA, CEBS
Dec 29, 2005
MONEYization:
The global financial phenomenon of individuals and businesses moving their funds to monies in which they have the highest confidence, or money which has a higher store of faith.
Or, Thoughts on Journalists & Gold
One can not help be regularly disappointed with the popular media. The business media, however, should be a step above the norm, as they should largely be reporting facts. Unfortunately, journalists feel compelled to filter the news through the sieves they consider brains. Business Week has historically been above average, but even they often cross the line from journalistic reporting to immature financial forecasting. Recently the SPECIAL DOUBLE ISSUE of Business Week arrived in the mail. Headline: Where to invest in 2006. Really exciting stuff was the implication. Like the occasional recipe, it turned out a dud.
Perhaps the lengthy discussion of the meaning of Gold and Silver prices at their current lofty levels was missed. Some journalist, with a serious investment knowledge deficiency, was allowed to write a few words on Gold. Here is the sum total of what I could find that Business Week allowed to be written on Gold in this SPECIAL DOUBLE ISSUE:
"Skepticism abounds over the sustainability of current prices, the highest in two decades. Given the runup, a pullback is a strong possibility - and some say it may be smart to make purchases if gold falls below $450. Still, don't bank on the $800-an-ounce record set 25 years ago, and keep in mind that prices fell below $300 during the 1990s."(Weber,2005,p.123)
There you have it folks, the research is done and you can sell your positions. A journalist, acting in the role of amateur investment analyst, has decided your Gold investments are futile. Bear in mind also that a few issues before this same publisher of journalistic business research recounted the glories of Google. Well one of them, Google or Gold, is going to fall below $300. In fact, one of them is going to fall by $300. And Gold is not the likely candidate!
Journalists and many investment professionals do not understand that the critical issue in this era is not growth versus value, inflation, or Google. Gold's price rising to cycle highs in so many national monies is the manifestation of the moneyization process. Investors around the world are moving to the money, Gold, in which they have the highest faith. The value of national monies is the issue of this era. Gold's price rise indicates investors around the world are turning away from existing artificial national monies.
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