I look for what the rich and powerful are doing, both governments like China, and individuals. Those who have something of an inside track with these people and organisations (like Jim Sinclair and some of Eric King's guests on his show) seem to think they're loading up on gold and silver, while Joe Public is still trading his jewellery in for cash at 60% of spot. To me that means gold is going higher over the next decade because, regardless of the inflation/deflation debate going forward, gold is too cheap given the amount of paper already in the system and the big money knows this.

I think we're in an attempt at an orderly devaluation of paper currencies against gold so we can inflate the debts away and go back on a gold standard by about 2020. 18% pa compounded gets us to $4400 by 2020 which sounds reasonable to me given the bull market so far. The central banks will try to manage that process but I expect it might get out of control at some point. Assuming triple leverage in the gold stocks and we should be compounding at say 50% per annum. Not sure now that compares to the HUI since the start of the bull market? Then you start thinking about silver and the silver stocks...

One thing I'm sure of is that the poor and middle class get shafted in all this unless they take steps, like we are, to protect themselves. Seems funny to me that they regulate the life out of everything but this cash for gold scam seems to be left to work itself out. Could that be because the oligarchs who really run everything want the gold away from the public and reprocessed into bullion form so they can buy it with paper money and stash it away for their own profit? Every time I buy a lot of junk silver on Ebay I email the vendor to tell them what a dumb thing they just did and to stop doing it!

Short term, I'm hoping we bust straight back through 1160 this week on the way to all times highs :)