Gold
posted on
Feb 20, 2008 01:35PM
Creating value through Exploration and Development in the Sierra Madre of Mexico
This is a copy of a recent email I received.Just wondering if any of you have any thoughts.And what effect sucha situation could haveon juniors in general but especially this junior.D, I just wanted to share a couple of things with you.I think you have vastly misjudged the extent of thelooming credit bubble that exists in this country.True the sub-prime situation affects a relatively smallgroup of people directly, but indirectly, it is indicativeof a much, much larger problem. The creation ofmortgage backed securities, indeed the entire derivativesmarket and the fantastic ballooning of credit thathas resulted is unlike anything in the history of world.The expansion that has occurred as a result of thesevast amounts of credit and the misallocations ofcapital that have accompanied all the cheap moneyfloating around will not be liquidated easily or painlessly. We are in the midst of what will very likelybe a prolonged recession and very possibly could turninto a major depression. How long that could last isanybody's guess. My view is that it will depend to agreat extent on government management ormismanagement of the situation, i.e. tariff laws,taxes and manipulation of the money supply throughthe federal reserve. The allure of gold and silver rightnow are each's ability to hold its value throughouttumultuous economic conditions as proven historically.Keep that in mind. When a government inflatesaway the value of a currency, gold and silver for6000 years have always done well. And we arein the midst of a world wide currency inflation processthe like of which has never occurred during thatentire 6000 year history. I just want you to thinkabout these things. You are a smart guy, but it isvery easy to fall into the trap of thinking things willgo on as they have for seventy years or so. They willnot, not this time. Matt