GOLDBUGS AMEX Goldbugs Index (GOLD)

[al44]

First, no one knows what gold will do in deflationary times. The price of gold has never been unregulated in any defaltionary period in US history. If we have a deflationary period in the future it will be a first with gold trading freely. Second, you are correct that a period of inflation will follow. In fact considering the amounts of dollars being created, it may be an inflation like no one in America has ever seen before, far eclipsing the late 70s and early 80s period. Fundamentals are quite different now than they were then. Everyone is eyeing gold right now because they believe, and I agree, that it has bottomed in this price range. Demand is exceeding supply the world over and spot price seems to be only reflecting paper prices at the comex. Silver is doing much the same. Precious metals "bugs" are a different breed from paper investors for the most part. They (we) tend to look longer term and like the fact that gold and silver have no 3rd party claims or guarantees upon them. I hope that helps a little.

..........al