looking to climb further, page-6

Summary of the mornings thoughts on PM - skip if you are in a hurry

Gold is not a sure thing, I am over-exposed because I am willing to take a chance from a moderate base on near-term producers, but I see the threat of Deflation is as likely as Inflation.

If the value of assets falls faster than the money supply created from the velocity of money, the prices of assets will fall, this system feeds into itself, and cashing up the banks will not work if people refuse to borrow.

Deflation = stay in cash, debt is bad, as value of money increasing from when you borrowed. Less spending and less borrowing.

Inflation = get into hard assets, debt is ok as value of money now is higher than later. Spending and borrowing increases.

Pretty important to get this right and would like to understand it b4 it happens if possible. At present most smart people disagree strongly - I am not smart enough to have a strong opinion :)

Having said all that, I feel a that PM stocks are set up nicely for a speculative bubble from people who really do not know what to do. An increase of 3-5% in portfolio weightings to 7-10% is a doubling in demand.

I am counting on this so that I can move some profits into other plays. Australian Agriculture makes sense as our Dollar will drop if China catches an even more serious cold.

However, the market will have figured this out, so a cheap entry may not be possible, making more speculative plays tempting.

just thoughts, need to zone in on the right questions, but still huge gaps in my knowledge and understanding, also some of this is stuff is very dry.

All the Gold mines coming on-line over the next few years will be a stress on the environment, but already there is increasing pressure for higher safety, working and environmental standards, particularly in the poorer countries.