Goldfinger -

Great link. I really enjoyed that Hussman Commentary. I will study his links as well. It takes continual study to untangle the multiple possibilities when dealing with the fed and the fiat banking system... I don't think its ever been in the position it finds itself today.

This is interesting to me as it touches on my continued internal debate on the safety of commodity stocks versus cash.

Your caution about being overexposed and our potential loss investing in stocks is well stated. These times are indeed difficult to predict. But I feel that commodity stocks are the best place to be, better then even cash. Cash or fiat could quickly evaporate in value, and seem to be evaporating even now. (Of course, you need some reasonable cushion of cash, or liquidity, always.. ).

Some of the quotes in your article point to this... It says 'The amount of liquidity that the Fed provides is minuscule in relation to... the volume of capital inflows (about 2 billion daily) that the U.S. relies on from foreigners.' That represents about $2,000 a year for every person in the U.S.! If that spigot is cut off... I assume the printing presses will HAVE to go into overdrive. The debtors will be paid off with ever cheaper dollars and our cash positions will be worth less and less with each passing day.

He also states 'Real interest rates are clearly under pressure here, which is supportive of gold and commodities and very hostile to the U.S. dollar.'

And from today's WSJ we have Daniel Rice of BlackRock Inc.. He's got good advice about investing in commodities and this advice applies perfectly to NOT.

He says 'one has to adopt a long term perspective, given the huge day to day volatility... investors who are unable to distance themselves mentally from he periodic sharp down turns, and who sell, or who... try to call a top ... and sell, wind up missing out on the subsequent outperformance.'  And also '...you will be shaken out during sharp downturns, and you will be drawn in by the real sharp upturns'.

and in relation to other stocks? Yes we are vulnerable, but in his opinion less so:

'If the subprime mess takes down world growth rates, it will have a relatively small, but some, effect on the stocks in this sector.'

These are some of the reasons I feel good with my money in NOT and other precious metal stocks. Much better then if my money were in treasuries, which can be debased in a very short period. If this debasement were to accelerate, I maintain that in the long period the commodities such as NOT would actually do fabulously in comparison to cash.

That is my judgement and my hope today... Time will tell.

Cheers

BK