late 2005 was an excellent time to buy junior mining shares, and it looks like late 2008 will be another such opportunity. with both consumer spending and corporate investment declining as the economy heads into recession, it will be up to the government to increase spending to keep the economy going.

i don't think it matters who gets elected in november; the spending may be on domestic programs or it may be on the continued occupation of iraq, but the money will be created and spent. we have already had barclays and royal bank of scotland announce that the us economy is in trouble. now fortis predicts a complete breakdown of the american financial markets within weeks.

that will not be allowed to happen, not with an election coming up later this year. but what it will do is open the monetary spigots. we already have citigroup, lehman brothers (and pick any other financial institution you choose) on the brink, and it is only a matter of time before another bailout is needed.

these problems will not be limited to wall street and the money center banks. it is only a matter of time before general motors needs help to stay solvent, and we really don't want gm going bankrupt. and as more companies default on their bonds, we will find out which banks or hedge funds are on the hook for $50 trillion worth of credit default swaps. with any luck, the culprits will be in the "too big to fail" category.

all this means there will be massive injections of liquidity into the financial system. we have already had bubbles burst in the nasdaq and real estate, and there is only one left. the treasury bond. with a yield of 4%, the 10-year treasury is below even the stated rate of inflation, no matter how phony that is. even so, some of the money will flow into stocks and bonds, but a lot of it will find its way into the much smaller commodities markets.

large amounts of money moving into a small market. that is why at these depressed levels, quality juniors have nowhere to go but up. volatility will be extreme, as there will be violent moves up and down with each credit crisis, but real mining companies with real assets will be the big winners. that said, we have the company that has the most silver, and the best projects.

as always, your mileage may vary.