Why this is important: Because sooner or later there is going to be a run into hard currencies and when there is, gold and silver are going to skyrocket and gold and silver junior miners with prospects are going to skyrocket too. In the words of the great James Puplava, "It will be like a NASA Space Launch." Doug Casey too has a great quote, "We're not talking about gold juniors going to the moon. We're talking about them leaving the solar system." Amen to that. So all we need now is some sort of a panic to drive everyone into hard assets. What will start it. Well I have a theory, so listen up if you want to.

Doug Casey is no slouch, in fact he puts out some of the most brilliant research in the junior mining sector I've come across. It's pretty voluminous. The newsletter is worth it just to get his take on the world in general and recaps of his zany adventures trotting the globe, but that is indeed another much longer story, so let's cut to the chasorooni...He was wrong in the early nineties when he predicted the big crash and Depressiion would occur about then. If you read his book Crisis Investing you will understand that Casey's basic premise was that in an economy built on spending, sooner or later when the spending stopped, the whole thing would implode. Low interest rates and easy money had created misallocations of capital (Doug Casey loves this phrase and it is right on--Basically misalocations of capital means that when money is cheap, people invest in crazy things that they never would if money was more expensive. In other words, if I could get a loan for 2% I'd be much more motivated to start a dog grooming business for vegetarian dyslexic poodles than if I could only get a loan for 18% interest.) So basically he was ready for a depression when all misallocations of capital would be LIQUIDATED. In other words, the whole system would be rebooted. Poodle grooming businesses would go out of buisness, interest rates would rise, people on food stamps would no longer have cell phones or beepers and tatooing would return to the realm of convicts and sea captains. But alas, this did not happen. WHY? Casey underestimated how ingenious people can be when they are about to lose their butts. People kept borrowing, more and more, and stupid businesses kept popping up. Another thing Casey neglected was what I call the rise of STUPID MUTUAL FUND MONEY. That is, all of a sudden everyone had a 401K plan. And they were putting money into it automatically every month and this was making things go up. Also, since they knew that they had this 401K plan that was going up they started taking bigger risks with the money they had left. They took out loans and bought dumb stuff they didn't need. They took on mistresses. They got their noses pierced. They bought new Nike's every 60 days. They bought, bought bought. And as Macbeth points out in Act 3 Scene 2, "Things bad begun makes strong themselves by ill." so people just started spending more and more, charging up credit cards. The race was on to buy more and more crap. Entrepreneurs saw all this money floating around and said, "He look at all these yo-yo's with all this money. How can we get it!" Thus, the internet bubble was born. Money flowed in, and it kept going, going, going. Then it crashed. Shouldn't that have been the end. YES. YES. I remember thinking after I had sold all my Intel and Cisco in March 2000 what a drag it would be that it was all going to end in a depression. But guess what, no depression. More spending, not enough PAIN, the Fed lowered rates and soon we were in another bubble in housing. Now we are finally at the end. Why, because peak oil is a reality and gas prices are starting to go up. Are people going to give up. Heck no! That's where the 401K plan comes in. Throughout human history most people have retired into poverty. Why? Because people cannot and do not save. If you force them to save, guess what, they'll do it as long as it's convenient, but sooner or later, they're going to find a way to get that money to buy new shoes. And I say that people are going to start draining those 401K accounts right about now to make their house payments or buy other dumb stuff. Better to lose your retirement than your house right? The problem is this...The 401k, i.e. S & P 500, Dow Jones IA is much more liquid than the housing market. And it's built on supply and demand. All that demand that drove down supply all those non-productive years when the myth of the service economy arose is about to kick into reverse and as these people start tapping their funds, the prices of the stocks which make up those 401k funds are going to start dropping. They are going to start dropping like a rock. This is going to cause people to tap them faster and the prices are going to keep dropping faster and faster and there is going to be a real PANIC. And gold is going to rise as it ALWAYS has, ALWAYS has in a panic. ( Have you ever wondered what is going to happen when you go to the grocery store and hand the guy a twenty and he says' "We're not taking those here anymore." It will be like an out of state check. You can complain all you want. Call the police, but ultimately you still are going to walk out without toilet paper. ) When the panic comes, and it is coming, because Casey was right, Gold and silver will go. Casey's timing was just off. He made the mistake that most sensible people make when judging other people, that they will act sensibly. "Of course nobody would tap their retirement account to buy diapers or pay off their Corvette." Think again. Think again. Bull