Final Word from Friday, February 18, 2011

The crown isn't one of the currencies regularly followed bywealth adviser Louis Boulanger, so he was surprised to seeit has performed better over the past decade than any of thecurrencies he does follow. Boulanger is a goldbug, and by hismeasure, the crown has lost "only" an average of 9% per yearagainst gold for the past 10 years, considerably better than thedollar (-16%) or euro (-13%). Boulanger's message to guests ofthe Czech CFA Society last night was that the global monetarysystem is doomed and that gold will play an important roleonce there is an "inevitable repricing of money." What wasmissing from an otherwise stimulating talk, in our view, wasany mention of how governments intend to fund this repricingwithout first confiscating all the gold. If Mr. Boulanger'sjob is to advise people on how to protect their wealth, the mostimportant message should be that at current speed, wealthprotection might at some point no longer be possible. We mustbe mentally prepared to lose all our wealth, gold included.

Glossary of difficult words

fool's gold - a brassy yellow mineral, esp. pyrite, that can be mistaken for gold;

goldbug - a person favoring gold as an investment; an advocate of a single gold standard for currency;

doomed - destined to have an unfortunate and inescapable outcome;

at current spend - if the political and economic development continues at the existing rate without a positive change in direction.


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word