Okay BearFund,

1st off, I've never written a column before, how exciting!!

Second, put an ounce of gold in your left hand and $884 dollars (spot price as of this last Friday.) in your right. See what happens in 6 months, then 18, then 5 years from now. At most points in this proposed journey through time whats in your left hand will buy you a very expensive, fine Italian suit at minimum. You can even throw in some designer shoes and a belt as well. 2000 years ago a Roman could by the finest robe, belt and sandals with an ounce of gold. That is what I call staying power.
Now check out that right hand. At some point you will be tempted to convert it to toilet paper. This is what I see happening and I am sure you will beg to differ, but before you do please do check out this article....
http://www.kitco.com/ind/fekete/jan302008.html
Kitco - Commentaries - Antal Fekete

Then this one...
http://www.kitco.com/ind/fekete/feb052008.html
Kitco - Commentaries - Antal Fekete

Next I want you to google moneyasdebt, Jekyll Island,GATA WSJ article titled "Has anybody seen our gold?"

I never mentioned Zimbabwe. Comparing their economy to ours is like comparing the atmospheric conditions on Pluto and Mercury. Read about the currency impolosions of the second Reich and Argentina. These were modern economies ham strung by debt and the external machinations of powerful foreign banking institutions who profited from the chaos they engineered. Sound familiar? It will... A good example of the forces at work would be to study what happened to the Mexican peso in the 80's and 90's. This link is excellent.... http://www.webofdebt.com/excerpts/chapter-22.php
Web of Debt - Chapter 22
In these countries all savers (cash holders) were completely wiped out. The U.S. of 1929 and the U.S. of today very different financial entities, not to mention social, cultural and political ones. In 29' the government wasn't a tenth as big or a hundredth as broke. We still had the world's best manufacturing base and infrastructure. Our agricultural, transportation and educational systems where the envy of the world and for good reason. The U.S. was a beacon on many levels. Our military industrial complex didn't exist and thereby threatened no one, domestic or foreign. These factors propped the dollar up then. There is nothing to keep foreign capital from fleeing the dollar except military coercion, market manipulation and investor inertia. All these forces will abate with time and the world's need for a hard currency will reassert precious metals to their historic position as the "real" world reserve currency.
How heavily do you think Greenspan's portfolio is weighted towards precious metals? I would bet $100 grand he is at least 25% in physical, junior and major mining stocks as well as some gold and silver indexes and possibly for fun, some ETFs. That's me being conservative. If I had to bet everything I had I would say he is doing the above to the tune of 80% with the rest residing in whatever GSachs is publicly advising to short.
If you don't want to get into precious metals at least hold Euros or, better still,Swiss Francs. These currencies will continue to out perform the green back for the foreseeable future. To your point that we are entering a deflationary spiral. Asset values will fall across almost all sectors and banks are in a cash crisis, but you have to look at the extraordinary measures being employed by the Fed now to inject liquidity by any and all means necessary. These clowns are desperate and with their strangle hold on the MSM (mainstream media)have thrown out the entire playbook right in front of the officials on the field! Forget the overturning of Glass-Stegall in 98', as much of a catalyst for destruction as that was the moves made by the Fed in the last two quarters are even more destabilizing with even worse long term consequences. Direct injections through the discount window, Using an insolvent public's money to hide corporate insolvencies that are even greater, revoking the most basic principles of contract law (Bear Stern's take over by JP Morgan was flat out illegal by many different measures)in order to keep delaying the inevitable day of reckoning.... These measures, coupled with the cartel's continuing inability to cap the price of gold despite pulling out every market manipulating trick in their bag all lead to credit contraction,asset depreciation, AND exponential monetary inflation! Sound impossible? It isn't, its happening and it will continue to happen until there is a major global market event which puts ole Helicopter Ben's back to the wall. Will the Federal Reserve Notes then rain from the sky? My bet is yes they will. Will massive deflation inevitably follow? My bet is yes, but I have no idea how long it will take for that transformation to take place. This is uncharted waters here. Everything is off the scale and unprecedented with captain's of finance very much steering a ship lost on a starless night with nary a compass aboard.
Precious metals are my life jacket. BearFund you can strap on yours made of dollars. I think you are going to drown in them, literally....

With all due respect that's hogwash. The speed with which hyperinflation can reduce a once liquid national commercial infrastructure into locally isolated barter economies is measured in days, not weeks, months or fiscal quarters. Just study Wiemar Germany or Argentina in the 80's to see what I'm talking about. The dollar could go from a weak pseudo reserve currency to a state of absolute worthlessness within a very short window. In these unprecedented times its conceivable that the computer programs which handle the revolving carry trade (the process by which very large speculators, including the shadow figures and institutions surrounding the Central Banks, borrow Japanese yen @ the current 0% benchmark and convert it into a higher yielding currency like New Zealands and use the yield as leverage to do all sorts of shady transactions) could trigger a massive dollar devaluation in a matter of hours!
There is almost no doubt that deflation would follow this unsustainable state of affairs, but would cash be king? Remember, once the dollar goes down it will not get back up. It will get no standing eight count either. There will be a new contender and his name will be the Amero. In this scenario your dollars will be as worthless as Parker Brother's script. In fact the kids of cash hoarders such as yourself might start playing monopoly with what was once the real thing as, besides kindling, it can serve no other purpose. If the Fed can engineer the politics properly, the Amero will debut along side the North American Union. This might work on this side of the hemisphere as lately it seems possible to fool all of the Americans all of the time, but the Chinese and Russians are a different story.
If the Chinese are suddenly holding 1.3 trillion in worthless dollars they could always make the Yuan a hard currency backed by silver. Learn here: http://www.kitco.com/ind/index.html#f and here: http://www.kitco.com/ind/fekete/feb052008.html
The Russians could make the same play with gold should the final collapse of the petrodollar create a void which Putin could exploit with a well timed petroruble. In these scenarios the holders of physical gold and silver will be greatly rewarded for their advanced understanding of monetary history and theory. Everyone else will be scratching their heads trying to figure out where all those mounds of Bernanke bucks came from...

Good comments here, but the back and forth on Republicans or Democrats taking the lion's share of the blame for this mess misses the point entirely. There is no difference between the two parties when it comes to economics. They have all (with the notable exceptions of Ron Paul, Dennis Kucinich and the late Paul Wellstone) been bought, coerced or flat out blackmailed by the international banking cartels (Rothschild, Rockafeller, Morgan, etc..) American academia has been all but completely striped of Von Mises economic theory to the point that, as far as the U.S. university system is concerned Keynesian economics IS economics. Period!
Fiat currencies reign the world over and there is no surer path to voluntary servitude than unbacked paper currencies. Inflation is the silent destroyer of advanced economies. It has been long before the Romans started clipping coins. The difference today is inflation is getting loud all of the sudden.
Even Joe six pack is starting to figure out that Budweiser is running what Heineken used to just a few years ago and that the wife's trips to the grocery store are making it impossible to make the minimum payments on all his maxed out cards. And its only going to get worse because the only way out for the central bankers is to hyper inflate the big bank's insolvencies into a South American style currency evaporation. This monetary bubbling over of the kettle means something nasty is brewing in the kitchen and everybody has to have a bowl!

Long term this won't work for the cartel, but it may buy them time.
Time enough to reverse our fortunes in Iraq by pulling another mission accomplished photo-op in Tehran and justifying a massive dose of Pentadollars just as the economy falters? Time enough to organize another 9-11 (only this time bigger and with alot less of Mossad's, the CIA's, the DOD's and Goldman Sach's fingerprints all over the place) and divert attention from the system's complete insolvency (WTC's 1,2 and 7 made Mr. Silverstein alot of money and covered his handler's dotcom bust tracks quite nicely. If that could work on Wall Street then maybe it could work on "the street". Think London people, because I assure you your masters are at least contemplating than possiblility.)? Or is the time being bought to reposition for the next bubble, possibly some biofuel/hydrogen infastructure/cleanest coal boondoggle to line up all the Wall street and K street crooks for one last gorging at the trough of public insolvency?
I don't pretend to know, but I am getting the feeling that the Central Banking Cartel has put a horrendous train wreck in motion. Their problem seems to be that they are riding in the caboose and, contrary to plan, can't seem to decouple it from the rest of the doomed line..... Beware a powerful beast that has put itself in a corner. Physical gold, or better yet silver, and six months worth of guns and butter ain't a bad idea either. If you are counting on returning to our regularly scheduled program, you are gonna be in for a rude awakening this year.