http://www.sovereignsociety.com/offshore2486.html

This is probably easier to read if it's read directly from the site. But here it is anyway for anyone that would like to read it. 

Long Live Real Money! Why I'm Wild for Gold This Year Today's comment is by Eric Roseman, Investment Director and editor of Commodity Trend Alert. Dear A-Letter Reader, As you may know, I've been a hardcore gold-bug for years now. But this year, there are even more reasons to love gold than ever before. For starters, the majority of mining companies are struggling to find new meaningful deposits. South African production has been interrupted by widespread strikes, so there's a severe supply shortage. Meanwhile, production costs are surging all around the world. And demand keeps increasing, because exchange traded funds are demanding more gold for their new offerings. Needless to say, the outlook for prices remains extraordinarily bullish. Right now, gold is hovering around US$907 an ounce. My gold forecast stands at US$2,000 an ounce by 2011. In fact, I'm thinking we could see US$3,000 gold before this glorious bull market draws to a conclusion around 2015. Unfortunately, the peak in gold prices will probably coincide with another financial disaster. This will be a historic debacle where banks and other financial institutions and possibly, several sovereign states, collapse under the weight of credit losses and unprecedented defaults. Gold Prices Have Hit New Highs Almost Daily Since January Gold will Outpace Most Metals Back in 2001, I predicted gold would top at least US$2,000 an ounce before this bull market ended. I definitely turned some heads with that prediction at Sovereign Society investment conferences. Today, that forecast doesn't seem so implausible. Gold prices continue to soar. Prices broke through the January 1980 highs recently. And prices are headed for triple-digits in 2008 amid the greatest bull market for the yellow metal in history. Gold has a long way to go to catch up with her sister metals. If you look at industrial metals like tin, zinc and lead - these have all soared more than fourfold off their lows in 2000. But gold can easily double from its current levels because supply strains will only exacerbate this tightening market. Up until August 2007, gold's rally was rather contained in a gradual manner. But that's all about to change. I see prices doubling and possibly tripling over the next five years as the world comes to grips with protracted supply deficits. The "Perfect Storm" for Gold The "Perfect Storm" for gold-bugs reads like a laundry list in 2008... Bullish factors supporting gold include: A secular U.S. dollar bear market since 2002 Plunging American interest rates Strong fabrication demand from India Insatiable investor demand for gold exchange traded funds (ETFs) earlier this decade In fact, total ETF gold holdings in mid-2007 now exceed the European Central Bank's (ECB's) gold reserves. ETF's holdings are also rapidly approaching Switzerland's total gold reserves. According to the World Gold Council, global gold ETFs now hold a record 865.5 tons of gold - and growing by the day as prices hit new highs. The ongoing global credit squeeze is also starting to infect other credit markets this year. Auto loans, credit card debt and leverage finance all remain vulnerable to further write-downs. Central bank policymakers just have one solution. And that is to create a rapid abundance of liquidity to stave-off the deflation threats and boost faltering economic growth. Lower rates are exactly the tonic spurring safe-haven buying into gold and other commodities as paper money continues to decline vis-à-vis gold since 2005. Even the three best-performing currencies in the world since 2005 have declined versus gold. These include the mighty euro, the Canadian dollar and the Brazilian real. Fears continue to mount about bank credit safety. The rising losses tied to mortgage-backed securities continue to threaten Tier One and Tier Two capital ratios. More banks are desperate to shore-up capital ratios, so global investor's fears have mushroomed since last summer. The result? Investors scrambled to the relative safety of gold. If all of this isn't enough to propel gold prices higher, then read on. Supply, more than any other variable continues to determine the primary trend for commodities. And on this score, gold mining output is seriously compromised going forward. The South African Factor Supply factors also remain conducive to higher prices. South Africa, which was the world's second-largest gold producer in 2007 for the first time in history, continues to suffer from persistent declines in gold output. South African gold output has plunged by 50% over the last 12 years. The country remains plagued my persistent miners' strikes, power outages and safety concerns. Annually, more than 200 miners are killed because of mine explosions and rock falls. And it's not just declining South African output threatening supplies. Canada, the United States and Australia, which combined with South Africa represent one-third of the world's gold supply, declined to 426 tons the first six months of 2007. That's a 2% drop from 2006 levels. Warning! Gold Production Decreasing Worldwide! In February, several large gold-mining companies warned of declining production. As more companies report first quarter earnings later this month and into March, gold prices are likely to head higher because traders will fear the declining gold production. Newmont Mining, the world's second-largest gold producer by volume, reported on February 8th that global gold production would soon decline, because new deposits have become more difficult to secure. "We see a continued decline in production - not just ours, but everybody's," according to Richard O'Brien, Newmont's CEO. A day earlier, South Africa's AngloGold Ashanti warned of declining gold output because of persistent strikes affecting production. This includes surging costs per mined output. The stock remains a poor investment in this bull market, down more than 15% this year while other gold producers' shares have soared. How I'm Playing This Gold-Bugs' Market My Commodity Trend Alert service, now in its seventh year, remains extremely bullish on gold and other precious metals. Recently, I created the CTA Gold-Bugs Portfolio for members, which gained 7% in January's market meltdown. Gold, silver, platinum and possibly, palladium, will continue to roar again in 2008. Supplies for the entire complex, except palladium, are growing chronic. Platinum is already in net supply deficit. Despite our bullish position, CTA does expect a severe short-term correction. Indian fabrication demand has been largely absent at US$800 an ounce while the commercials remain net short. Only hedge funds and other speculators are heavily long at these levels. Gold, silver and platinum have already come a long way since August and have not suffered meaningful corrections. Corrections are perfectly normal and healthy in a secular bull market. My strategy is to limit new investments to precious metals at a maximum 35% of your total targeted allocation now. Also, dollar-cost-average your remaining positions as prices decline over the near-term. Even with all this bullish news, watch for precious metals to pullback in price soon. But I don't expect an upcoming correction to last long amid a growing global credit crisis, more financial sector write-downs, lower global interest rates and especially, declining gold output which could tip gold supplies into net deficit later in 2008. Buy more precious metals on the dips, and stay the course. Long live real money! ERIC ROSEMAN, Investment Director