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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Sweet Ol who wrote (39206)	2/13/2005 10:55:12 PM
From: Taikun	Respond to of 206226

John, <I have been reading Puplava's stuff for years and cannot remember him being optimistic on anything other than gold.> Puplava seems pretty optimistic on commodities in general (he had Jim Rogers on a few weeks back) and thus appears to be recommending energy and commodities for clients. I think it depends on whether you believe increasing oil and other commodity prices are inflationary or not, because if they are disinflationary, a different set of decisions needs to be made with respect to one's portfolio allocations. Right now, many investors in oil and gas invest on the premise that oil is inflationary and energy in the portfolio allows one to 'keep up' with inflation (actual inflation, not the fuzzy CPI). It is here that I question Puplava's 'Supercycle in Commodities'. What if it isn't a supercycle and increases in commodity prices are disinflationary? If deflationary, and we are facing a depression, then Puplava's argument that energy in one's portfolio as a wealth-preserver may not be true. (Remember that Japan's deflation coincided with a decrease in oil consumption and a fall in global oil prices). Gold and silver may not help much either, since they need to be 'converted' to cash. In this scenario, the thing to hold is the thing we all try to 'put to work'. That thing is cash. I'm not trying to be overly 'negative' here, I'm just trying to match the probability that we are headed for scenario 'I' (Inflation) with appropriate weighting in my portfolio, and the probability of scenario 'D' (Depression) with a weighting for that also. Right now, I bet 60:40, 60% 'D' (2/3 cash, 1/3 physical gold and silver), 40% 'I' (commodity stocks, primarily energy and uranium). David