The posters from the Tyhee board (whether they post here or there) seem genuinely uncommitted. They remind me of children saying to their daddy on a long car trip, "Are we there yet?" over and over again. It is not encouraging or up building. This board has a better "spirit" about it. 'nuf said on that subject!

There are cycles which repeat in investing. One of them is the Dow / Gold ratio. Twice in the 20th century the ratio fell to parity or very nearly parity. Currently the ratio stands at approx. 12. In the aftermath of the great depression the stock market fell to about twice the dollar value of gold. In the aftermath of the inflationary 70's gold increased to match the value of the Dow. Whenever great upheavals take place in the financial system take place you can count on this indicator heading towards low single digits.

This time (though many would argue this point) it appears that the U.S. and much of the world are going to be dealing with another bout of inflation. The U.S. debt if figured according to GAAP accounting as opposed to cost basis accounting is north of $50 trillion. Being as it is just flat out impossible for those commitments to ever be covered without devaluing the currency one can pretty much guess what Helicopter Ben and the FED will do. In fact I once heard Greenspan say in answer to a congressman's question whether the money for Social Security and the gov'ts other programs will be there he said, "It will be there, I just don't guarantee what it will buy." I could hardly believe my ears as that was the first statement I ever heard him make that was both direct and honest.

So regardless of whether there comes to be inflation or deflation the Dow / Gold ratio is on a beeline for low digit single numbers. When and if it ever turns up again it might just be time to buy the general stock market again. But based on this low time indicator there is a very positive future for the gold junior stocks ahead.

As to whether this episode is anything like the 70's, according to John Williams and shadowstats.com the current inflation is greater than the worst of the 70's and the unemployment is higher than the 70's using the 70's methodology to compute both figures. The crisis the world is facing in this case is not finished in comparison with the 70's numbers....it is just beginning.

What we are interested in is not the eventual dollar value of our holdings but rather their purchasing power. Those who own gold, silver, and gold junior shares will have adequate (if not enormous) purchasing power no matter how this mess ends up.

P.