henty, page-8

Hi Axegun and all,

All I can say is that Gold is working for me as I started buying back in 2002 and still believe the overall 10-11 year trend is intact and has many years to run.

I understand the feelings of anyone that purchased gold in the last eighteen months it must be very frustrating.

There are many reasons I believe gold is going to be priced higher when measured against printed dollars just look at the way the clowns in power are addressing the current world financial problems for instance.

Printing money out of fresh air and giving it to the bankers to rotate within their own industry may push up stock prices and give the appearance that all is well. However; tell me when you last heard of some new business opening with 5,000 new jobs rather than a similar size business closure?

At present with all this money printing we are seeing some unusual things such as both inflation and deflation running side by side. That is deflation in all the things we already own such as houses, cars, boats and other large items and inflation in all the things we need to buy regularly such as food, fuel, clothing and other necessities.

I don’t see any positive action by any government to even slow down their spending and I believe many of these enormous debts are now truly unrepayable.

In light of this I convert any money beyond my current needs into physical Gold and to a lesser extent silver and also what I believe are good quality Gold producers. This is the only way I can see of protecting my future purchasing power! Although I must add the caveat that I did not buy any Gold shares until I had what I considered a substantial holding of physical metal.

What could I do as an alternative sell all my gold and gold shares and invest in the general market (No thanks) or put my cash in the bank for a true negative interest rate and wait for a Cyprus style financial pillaging?

In regard to UML specifically I believe the management are doing a good job and are pushing ahead to become a 100,000 ounce producer within the next twelve months. There also appears to be good scope for increasing reserves and production at the Henty mine site and therefore I am willing to continue to hold for now.

If we do see a substantial crash in the general market and I believe this to be entirely possible and the gold producers are also hit I may sell some physical and buy more shares in UML!

I am under no illusion that trying to stay ahead of the game under the current conditions is for those with a faint heart but looking back to 2002 and my first gold purchase I can tell you I am doing a great deal better than a lot of other people I know.

There may be a time in the future when I need to change my tack and move out of gold and gold shares; however, I am sure I will get plenty of clear signals from the market such as:

Interest rates once more above 10%.

Governments reduced in size and running within their budgets and acting in the best interest of their citizens.

House prices around the value of three years average salary or ten times the annual rental to be affordable for the current generation and not just a dream.

News of thousands or real productive jobs being created and unemployment and underemployment being reduced.

Of course I won’t be holding my breath for the above to happen but I will be holding physical gold and gold shares and sleeping like a baby!

Cheers and very best regards: Andy