** THOUGHTS FROM THE FLOOR ON GOLD **

From a pan asset class point of view we note that despite the good price
performance (in local currencies) of developed equities, bonds, commodities and
real-estate the past year, these major asset classes all lost value when
measured in terms of Gold. Over the past year Gold rose approximately 50% versus the Japanese Yen, Euro and Pound Sterling, and about 40% against the U.S. Dollar, leaving the performances of aforementioned asset classes far behind.
Although we appreciate the point that this rally in Gold might be fuelled by a
growing cultural demand (India & China) and the recycling of oil dollars from
the Middle East, we don’t think Gold is merely a commodity. In our view Gold is
the longest serving currency of our time (since 3000 B.C). With the supply of
fiat money continuously on the rise, as central banks around the world
aggressively make use of their license to print money, we feel that the strong
performance of Gold is whispering a more important message. Could it be that
investors are loosing their faith in fiat money and are more rapidly returning
to the age old protector of property rights that even Alan Greenspan once loved?