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To: NucTrader who wrote (358623)	2/20/2008 7:11:42 PM
From: stan_hughes	Read Replies (2) \| Respond to of 436258

Re: your PM, which I think deserves a public response -- if gold isn't the perfection inflation hedge, then it'll do until the perfect one comes along. We saw 20% mortgage rates in the early 80s, so 9% doesn't get me worked up, even if it means a double from here -- since the mess we're in now dwarfs anything Reagan ever had to face, I figure if we give the current wizards a little more time, maybe they can foster circumstances that will see the old record broken. Having said that, I think it's more likely they will keep trying to hold rates down as long as possible and consequently allow the dollar to continue to deteriorate instead, because few Americans grasp that as a hidden drain on their wealth. What will upset the low interest rate & falling dollar apple cart is when the Asians (as principal US creditors) finally decide they've had enough and refuse to roll over US debt in US dollars, and possibly even start to sell it -- at which point you'll get your US interest rate spike, and then the wheels will come off of everything in Assetville except cash (which will have already been beaten into the dirt on a forex basis). So we all need to be careful about what we're holding depending on where we are in the cycle, the biggest problem as a private investor being, does the Asian investment mutiny start in 3 weeks or 3 years -- nobody really knows, so the strategy remains (a) stay long a good chunk of physical gold (b) avoid US cash, bonds and non-PM stocks, and (c) keep a close eye on the interest rate and forex markets for signs of the big shift. When that turn materializes, you will still have to make another big decision, i.e. deciding whether to switch back into US cash hoping to ride rates back up to where you can pile into the long bond at 20-25%, or whether by then the USD is too far gone (diluted) to risk holding (i.e. the Weimar point-of-no-return is in play). One thing is for sure, the world is going to be a very different place when the day comes that you find yourself making those choices