I haven't looked at the Tyhee board for quite awhile... mostly because I've been out of Tyhee for a long time now and haven't felt any reason to get back in.

I subscribe to Frank Barbera and have for a long time. Understand that he plays it fairly cautious. I think his portfolio is geared towards capital preservation more than growth.

According to his newsletter he never recommends more than 20% of one's portfolio to be in gold or gold related assets. The other 80% ... that's up to you. Cash maybe? I asked him once but didn't get a definitive answer.

So when his portfolio is at 65% or 55% invested, this is only 55% of the 20% he's recommending be your limit.

Frank has also missed some rather large moves, most notably in 2007. He really missed that one.

Lately I've been reading a lot of comparisons to 2007... to the time just before gold was taken down during that spring. I personally don't feel it's a worthy comparison for a number of reasons. In fact, I think we're looking a lot more like the Fall of 2007 when prices began to soar.

The dollar is clearly on it's heels and gold is clearly getting the respect it should have had as currency alternative to the buck ever since China announced that they're increasing reserves. When China did that, it was a game changer.. it told the world "Look all that talk of gold no longer being relevant is hogwash... We're buying it and we're soon to be the worlds most powerful nation and largest economy".

Secondly, almost all the newsletter guys are calling for a pullback in gold. That's a sure sign that support will hold. These guys are the worlds worst market timers. They almost always get it wrong. They do well with buy and hold but they tend to over time the markets. I think Goldman just waits for them to go short and then goes long themselves... it's like a game and they are the Washington Generals to Goldman's Globetrotters.

Korea and Pakistan are both providing some potential for geopolitical tensions. BAM has to do something to Korea and it could get ugly.

Then you have inflation and no matter what anyone says, inflation is on the rise. Incomes are the only part of the inflation equation that are not on the rise but production costs are not dropping. In fact, they will now rise for a couple of reasons. We all know how increased production increases efficiency and thus lowers per unit costs. Well what about when you suddenly cut production in half. What does this do?

Obviously efficiency gains are lost. However, now you have a bunch of increased capital costs on the books that you didn't have prior to the increase in production. Those new machines you bought to meet the larger demand. It's not like you can simply turn down the dial to when you were previously at these lower production levels.... your costs will now be higher than then.

This is true across the board going right back to the suppliers who make the parts that go into your final product. It even hit's raw material production costs and fuel costs. As these increase costs are reflected at each stage, it magifies the price increases.

Right now we are only experiencing deflation based on the fact that current inventories are being sold off. It's been a year long massive liquidation sale. However, as statistics clearly show, inventories are now being used up and demand is starting to catch up and even overtake inventories in some cases.

That's when you get inflation. Combine this with an increasing money supply, increasing interest rates and a declining dollar and you will find increasing inflation. It will not be long before unions stop accepting wage cuts.. and many will demand increases based on the cost of inflation.

For my investment, I'm betting on inflation. Not the hyper kind that the morons on FSN kept yammering about with their absolutely stupid comparisons between the Weimar or Argentina and the USA (they seemed not to notice that the US is the world's most powerful nation and that the USD is the world's reserve currency)... but bigtime inflation.. maybe 20% or more..

20% over 3 or 4 years and you will have a debt that exceeds 18 trillion. That will lead to further dollar devaluation and more inflation..

I believe this process is underway and see little potential for gold to drop below it's current support level.