As I was working tonight I couldn’t help but wonder where we are going with this melt down. I am the furthest thing from a seasoned investor so my thoughts here may be way off the mark. So far, what I see happening is things are done in extremes. When the market goes up, it goes too high too fast and when the market sells down, again it goes too far down just as fast. These swings play with our human emotions making us indecisive. So we alternate between greed (this is the bottom-buy now) and fear (sell now and preserve capital).

I see governments throwing trillions of dollars into the economy trying to stimulate growth and create stability in the world. At the same time, I see cut backs everywhere. Companies are cutting jobs and capital spending drastically. Consumers are scaling back their spending habits. It’s hard to spend when you’re not sure you will have a job tomorrow. Consumer confidence is very low. Producers are reducing production due to lack of end users. Gas and oil companies are shutting down projects. Mining companies are closing all except their most profitable mines.

This makes me wonder what will happen when the trillions of dollars trickles down the chain and into consumers pockets. The basic fundamentals of supply and demand will be off balance. The demand will return but the supply will take time to come on line which will create a sharp increase in the value of commodities.

I am not brave enough to put a time line on this theory but I think when this happens everyone that has believed in the long term NOT story during these very trying times will be quite happy. Our high-grade world class deposits are still safe beneath the ground patiently waiting for the world to right itself. We have money in the kitty and no debt. These will help us ride out the storm. As Richard stated, “The ROF is going to be staggering”. Our day will come.

Take Care All