I agree that we could see a 89% equity delcine if we were in a free market system, but there are some real differences with 1929 and now. The biggest contrast between now and 1929 is it is obvious that the markets today ARE NOT FREE MARKETS:

1. We have the famous PPT now that can intervene daily in the markets. We have all seen it happen.

2. We have trading curbs in place to limit one day losses.

3. The gov't has already demonstrated that they will stop short selling. What is the next ban? Can't sell my shares unless I have held for a year?

4. The Fed is now printing money like no tomorrow and will lower interest rates to ZERO if needed. The window of available capital is always getting bigger and rates lower.

5. The Treasury has now suited up and is our star quarterback buying any debt that is worth less than invested value(They will spend over a trillion dollars before this year is out).

6. The politicians are committed to support market prices. They are the laziest, most incompetent bunch around, yet they have worked all WEEKEND to get the bailout plan finshed before what time? Before the MARKETS OPENED in ASIA. Enough said.

I do believe that we will see a decline in market prices. For the reasons above, I believe it will be gradual. At some point, the inflationary forces of all of the $$ above will kick in and the actual price of all assets(including stocks) will increase.

Here is what I see happening... The bailout will have a minor positive impact on the market(maybe a week or two). We will see pressure when 3rd quarter earnings come out next month and the reality of this is apparent to Wall Street. This will pressure the market down. By that time, many people will have gotten their 401K statements showing 25% loss in equity and the reality of this will be appareant on Main Street. I know many people sitting on hundreds of thousands of dollars paper losses and they are sick. This will lead to less buying and some forced liquidation and more pressure in the market. We could see another 1000-2000 point loss on DOW in Oct/Nov. I do not see a total crash. The forces above and the newly elected President will insure prices rebound.

So what do you do with your money? Most people have lost confidence in real estate, so investments there will not happen. Equities will have the same stigma as the NASDAQ did in 2000, so most of equities will have a terrible stigma. The lack of confidence in markets and the government and the system will provide the golden opportunity for hard assets like GOLD and SILVER. The smart money is getting in now and I believe the launch will start later this year. I am beginning to pursuade people to buy silver and gold because they are afraid of everything else. I have persuaded 5 people to buy in the last month and I had not convinced any people in the last 5 years. I do believe that the equities that are producing gold and silver will do very well during this period. I am concerned about equities in companies not producing. They need to be able to weather about a 1 year capital storm.

This is the moment I been waiting on for years and it is finally here. I am willing to let some of my shares drift lower so as not to miss any of those $100 days in gold that are coming. I would encourage you to do the same.

SilverNut