I'm all in with SKP and SGR my majors, and the 3 varmints - cougar, bison, and the wiley wildcat -as my minors. I'm not diversified, and I, obviously, am not a good investor, though I hope to be a lucky one. And, I have no protection against a huge drop in the price of gold.

So, what are the chances that gold will have a huge drop ? The biggest thing going for gold is the central bank buying by countries, who are debt holders of US dollars, and are furious at the US expansion of their money supply and credit. The Chinese government ,after telling it's citizens to buy all the gold and silver they can afford, can't let the price of these 2 commodities fall, much. Chinese citizens know about their huge national surplus of dollars, and there would be a lot of nastiness in the streets if the central government didn't continue to buy and support the price of gold/silver. This is a situation without any real precedent, as far as I know, and fortunate for us.

So what could go wrong ? Well, for starters, look back at what Paul Volker did in the US in 1979,1980. When inflation accelerated, he raised the fed borrowing rate to 15% or thereabouts - . Unemployment went up above 10%, the US and world economies slowed, and the dollar strengthened. Gold was below $200/oz in 1978, over $800 in 1980, and below $350 by 1982, where it, mostly, traded in the 350 to 450 range until the run up of the last several years. The politics of the present US government, have committed themselves to supporting easy money policies as long as they can.

Richard Mayberry of the Early Warning Report,has suggested that we may be in the late stages of The Great Monetary Calamity, after the final dilemma occurs. Market forces have not been allowed to run their course. THe US fed showered cheap money on their favorite recipients, based on political considerations, mostly, and they must keep supporting the malinvestments that were the result. We may be nearing the point where there are no buyers for the treasury debt, and the no-win choices are to print more money causing extreme inflation, (possibly over 100%), or raise interest rates and withdraw credit causing the inevitable, huge recession or depression. Mayberry gives a 30% chance of the fed raising interest rates dramatically, as Volker did in 1980, causing a huge drop in the value of non-dollar assets. That would include gold and other commodities.

The dem's in the US are committed to the "quantitative easing" program, as nobody has the political will to do otherwise. However, the US voters do not seem to be very happy, and will probably, send the dems packing. Obama won't be back in 2012, unless he changes his ways, dramatically, and then the Republicans may inherit the same dilemma. Will they raise the rates, pull in credit, and start the depression of 2013, or will they feed the runaway inflation that Mayberry thinks will otherwise occur. If the dems are sent packing, the odds of the Volker scenario go up. This is a 2 to 3 year time frame, but the Great Monetary Calamity could happen before that, possibly within months, in the view of some.

The dems will try to gain votes by letting felons vote, and offering citizenship to illegal immigrants, whose best interest, then, will be to vote for the dems in the next election.. Thats a lot of voters, but I think they will lose most of the swing voters, and that's, probably, a bigger block at this time.

So my parting question to you is this: how might US immigration policy effect the price of San Gold ?

John Ehrhart