Mises, I've been reading your namesake lately. "The Theory of Money and Credit" is very thought provoking, especially when I realize that the edition I'm reading was re-published at the height of the Great Depression. It's a hard idea to get your head around, that fiat money has no intrinsic value. The central assumption of modern society calls for a dollar that will always have an intrinsic value of some sort.

Baires, your call on selling AUY/YRI would normally be mine, too. Why not take profits while you can? But I'm holding on to my Yamana and Kinross, and here's why. I think macro economics might trump the normal fluctuations in the market over the next two months:

I think USD dollar depreciation may be upon us very rapidly. The Canadian dollar will be down on sympathy, if not for the deficits the Canadian Government is planning to spend.

We haven't seen the December 2008 treasury figures yet. They came out around January 15 for November 2008. I can only assume they will be out on Monday or Tuesday for December 2008.

In other words, we have a two and a half month lag between the figures of treasury bond and note sales to foreigners taking place, and their publication as common knowledge. Things were really ugly in November. The trade completely turned around, to the tune of 55.7 billion, 22.9 billion to the negative.

What happened in December? What happened in January? What is happening now? December wasn't a month of confidence in the U.S. economy. Nor was January. I've heard critiques of Schiff's analysis, but it's got a ring of truth to it. Abandonning the U.S. economy/dollar standard would be something that built in momentum. Did it start in November? Has it been getting worse?

Speaking of credit bubbles, the greatest one of all time is the U.S. government debt (over 10 trillion and getting worse by the day). When will it burst?

I was wrong about them being financial weapons of mass destruction, but right about guarranteed mutual fund products being an issue (witness the 2.3 billion Sun Life writedown on them this week) I find it interesting that people think it's reasonable to assume this is a one time write down. These products have a redemption life of 10 to 15 years. You may have to wait ten years to get your full dollar value back. They have also been increasing in popularity. In other words, the redemptions will continue on pre- November 2008 values will continue for at least another 10 years, and the losses will be greater in value because sales were increasing over the last nine years. I guess Sun Life had better hope the government does inflate away the value of the dollar, or that the market goes through a miraculous recovery.

MR