I really have little to add to the good posts of Thirsty and Coach, both have wisdom.  My only comment is the valuations of the gold stocks in general and particularly the juniors versus the metal prices are at the lowest level since the start of the bullmarket.  If I have learned one valuable lesson over the years it is that money will always flow to the lowest value asset class from the funds and institutions and the only thing holding it back recently has been the worst solvency crisis since the 1930's for the big banks.  This made the funds very unsure of what to do since most have no experience with this kind of event and all were trained in the last 15 years, relative neophytes in market terms.  They are just now starting to see the light and realizing that the world will not end, get gold and silver stocks along with physical and a US slowdown doesn't have the same connotations of years past given growth rates in the rest of the world.  The rest of the world sets commodity prices now, not America, and this simply is a concept many Baystreet kids and NY kids don't get or understand but are warming up to now.

Only a depression will cause serious market dislocations and that is still remote or a monetary collapse, again remote.  We haven't had a depression since 1930's and monetary collapse only in isloated country cases and none in Western givernements since Nixon defaulted on the gold standard.  Still the odds of these events are higher than a year ago.

I see Stagflation as I said was coming in May 2006 and have prepared for ever since.  I note in the 1970's we had 3 recessions and poor housing prices  but commodities and commodity stocks were by far and away the best perfroming asset class.  In fact both general stock markest and housing performed badly in the 1970's or did it.  I bought my first hosue in 1977, got a great price and made money as I did in the stock market so some adapt and some don't.  Wallstreet has a habit of adapting and selling junk to the world, characterized as we give you useless paper and you give us Mercedes benz cars.  They never meet a bubble they didn't like or create and they haven't even gotten on board commodities, yet.

The more money they print and the more inflation they create the higher we go and the kids are learning this now and will want to profit as much as you and I who are ahead of them.