Thanks for the nice comments.

First, I own FWR and SPQ as sideplays, so that is good news today. I also have BMK (we’re all waiting for a breakout). I wish I had FNC.

Will the crash of the US economy hurt base metal prices? Yes, but not for a while. Growth in China, India, and the Middle East are not going to slow over night. 2008 is going to be a good year for all commodities. The problems don't begin until 2010 for the global economy.

Watch the US economy this year. Watch as it continues to break down. Do not assume that it will recover. Be a skeptic. As I stated, we are heading for an energy crisis. Without cheap energy the whole ballgame has changed.

Increased energy costs have raised the cost of mining. This is another reason why juniors are languishing. No one knows how expensive it will be in a few years. Thus, the risk has increased for owning these stocks.

Someone else asked about deflation.

This is tricky one. Mish Shedlock on his blog (http://globaleconomicanalysis.blogsp... ) is making an impressive argument for deflation. But I’m not convinced. Yes, asset deflation is upon us as housing prices deflate and the stock markets follow. Also, bond/MBS/CDO/SIV assets will deflate with a trillion dollars in losses. The reduction in credit also causes deflation. Thus, if you suck a few trillion dollars out of the economy through losses and you ALSO decrease credit availability, you will have a powerful trend towards deflation.

However, deflation is defined as the decrease of credit AND the money supply. The Fed has unlimited power to determine the size of the money supply. If they want to create inflation they can. It is really that simple. This is something that Mish and his group of followers understate.

The likely scenario if the Fed pursues this game of printing money is hyperinflation. Will it happen? It’s hard to say, and I haven’t made a bet on the outcome. I’m still waiting to see what Ben does. You see, he still hasn’t given away much money. Most of it has been loans. This year he will have to play his hand – and do some serious bailouts. I.E., he will have to start giving away money.

In the short term (1-3 years), I think we get inflation pressure, especially in food, energy and commodities. This will translate into all commodities. Gold is going to at least $2000, silver $50.

In my mind, I don't see deflation before 2011. And maybe not even then. If rent prices go back to the year 2000 levels, is that really deflation? Will a dollar go further? Will food be less? I somehow doubt it. That said, there will be some serious deflationary trends. I think used Porches will be half price.

As for the global inflation/deflation debate. I think the rest of the world will follow our lead. Time will tell, and I could change my mind on this one.

Newager