Goldcarp, Even Jim Sinclair can't see a return to the gold standard as a possibility. That's what makes its return so much more inevitable. It is a contrarian's ultimate call, something even all the contrarians miss.

In Denver two years ago a friend and business associate of mine and I cornered Mark Bailey, the CEO from Minefinders. My friend asked Bailey point blank what he thought of a possible return to the gold standard. Bailey answered that he couldn't imagine such a scenario. He said that banking played such a crucial role in markets today that he couldn't conceive of a world where banks weren't a necessary part of it in a large way. My friend turned to him and said, "Don't you understand? You're the gold miner. You are the bank." Bailey did not understand, but I did. I also understood the significance, especially involving markets in being able to see things that remain obscured from even those most intimately connected with said markets.

When I introduced my daughter years ago to her new tennis coach I informed him that she would be alternating dominant hands each week. One week she'd serve and have a right-handed groundstroke. The next week she'd serve and have a left-handed groundstroke. From the net she'd have to stay with whatever side she'd gone to the net with, but from near the baseline, she'd have plenty of time to switch hands, especially if she had been trained to be used to it. His response was, "I've never seen anyone do that before." My response was, "Exactly!"

Goldcarp, Your thinking is interesting, and follows a similar line of reasoning that the great majority of humanity do. The gold standard could never happen because so many people are aligned against it. But this is like saying that the great flood could not have happened because so many people were aligned against it, or perhaps the Haiti Earthquake or the many following earthquakes or the many that will be occurring in the next few years.

Interestingly enough, you refer to a return to the gold standard as a last-ditch effort to bring some sort or balance or order to a crumbling system. To the contrary, what is going on now with the government, all this printing of money, is the last ditch effort. A return to the gold standard is nothing more than a natural progression.

As an illustration: I could be considered a proverbial "health food nut". I eat mostly organic, no fried foods, only whole grains and I have about one dessert with refined sugar in it a year. I eat meat about twice a month, and I haven't had a soft drink or eaten at a fast food restaurant for more than 17 years. I once read an article in some popular magazine that criticized people with diets like mine as being what they called "food faddists" They were implying that the whole grain, organic trend was a "fad" that would eventually end like all fads do. The flaw in the writer's logic, however, was that he failed to see, in the typical American way, that McDonald's hamburgers and Cokes are the fad. Processed food and refined carbohydrates, eating meat three times a day...these are the fads. Throughout 99% of human history, people ate whole grains, little meat and did not have soft drinks or McDonalds.

What I am illustrating here is that all of us tend to equate our situation as being a normal situation. We are like sea lions brought up in captivity, never understanding that life isn't about balancing a ball on our noses so some trainer can throw us dead fish. For such a creature there exists a whole different sea lion reality "out there" that it can't comprehend because of its upbringing.

The "faddist" is not the one who advocates a return to the gold standard. The "faddist" is the one who believes in the inviolability of a paper money standard.

Also, Goldcarp, hyperinflation where bread costs $20,000 a loaf will occur before we are forced back onto the gold standard. I say forced, meaning in the same way, water in a tub is forced out through the drain by gravity. This will not be a choice. It will be a mad scramble into the only viable currency left standing when everything else disappears. During hyperinflations, the value of gold ALWAYS outpaces the value the currency. This must happen because, hyperinflation is a currency destroying event that happens so quickly, the value of gold cannot be adequately obscured form the public view. In fact I would put forth a case that the definition of hyperinflation could be any inflationary process that has a part of its dynamic the consistent up-trending rise in the gold price. Looking at this definition, we have been in hyperinflation since about 2000.

In any event. The end of hyperinflation is a total loss of confidence in paper currency and thus, massive deflation. Credit, paper, iou's, every substitute money disappears and only a real money will endure, i.e. gold, silver, oranges, diamonds, seashells, whatever, people decide it will be. A logical question might be then, "Well what if people just all decide to come up with a new paper money and everyone agrees on that?"

This is the same argument I have trying to shoot down involving why the Chinese, the Arabs and the Russians are NOT going to get together and form a new basket currency. Why? People cannot cooperate like this under times of stress.

It's a lesson I've learned coaching a lot of baseball. It's easy to say, "Sure we'll just pitch this kid, then this kid, then this kid and everything will be fine." The problem is that most kids pitch fine when their team is winning by 5 runs and everything is working well. When their team gets down by 5 runs, everything changes. Kids' arms start hurting, balls start missing the target, kids start yelling at each other. Yes, indeed, its very easy to be friendly when you live in a country where your paper money system allows you to live a standard of living higher than 99% of the world and have the rest of the world work like slaves to pay for it.

It's easy to get along with people and come to agreements. But when food starts running short and your electricity gets turned off more often than you'd like so the poor family across town can have T.V. too, things get a little bit more complicated.

What people don't realize is that the American dollar system was a colossal stroke of good luck. It was a tremendous scam that the U.S. got away with because of the tremendous prestige and power and timing we had near the end of World War II.

It was similar situation to what would happen if a famous celebrity, like Warren Buffett, showed up to your house and asked if he could stay there and use your bed to sleep for a few days. You would vacate your room immediately. Not only that, you'd go out of your way to make him feel comfortable. You'd shop and fill up the refrigerator with all the things he likes. In exchange, maybe he'd have a few conversations with you at dinner about some of his investment ideas. You'd consider this more than a fair trade. You would go out of your way, in fact, to try and convince Warren to stay as long as he could.

What happens however if after a few years, Warren starts losing in the stock market? He takes up drinking and becomes an alcoholic. He starts watching pornographic movies on your family computer and showing them to your kids. Where is the point where you say, "Enough, Warren get out!" Of course, your neighbors would be shocked. "You're kicking out Warren Buffett? Are you crazy?" would be their initial and even prolonged response. But the truth is that you would be kicking out Warren Buffett. Sooner or later everyone, even Marilyn Monroe, gets kicked out.

I can always tell a sure sign of someone without adequate self knowledge or an understanding of the human condition: Such a person will, if asked, say something like, "I would never or "could never be induced under any circumstances" to kick out Marilyn Monroe or Jennifer Aniston or whomever. Those are the people we are competing with on a psychological level who cannot adequately see the disappearance of the dollar and a return to the gold standard.

Once again, let me reiterate for you all here. A return to the gold standard is not just probable. It is INEVITABLE. Please remember that I said that here and now. I don't know what is going to happen to Kimber, but I do know this. The odds of it not happening are about the same as winter not returning next year or prostitution and gambling ceasing to exist in human societies within the next few years. Bull