I will keep my mining stocks.

China is the World's largest producer of gold. They don't export any. When was the last time you saw a Chinese Panda coin offered for sale? The long gold play is unwinding and every day gold is dumped in New York. Overnight the Asians buy. The dollar is increasing in value rapidly as other currencies plummet but for millions around the World, gold is still the hedge of choice as their countries economies crash and burn.

South African mines are languishing, beset by labor problems, power shortages, no money for capital improvements and a rapidly deteriorating political climate. In the West, the strength of the dollar is causing gold and gold mining stocks to plummet, along with the rest of the commodities and equity markets. The big Western mining companies are still flush from record sales during the gold bull of the last few years. Insider buying intensifies as stock prices continue to be pushed down. Juniors are being bought up for peanuts. Those companies that continue production are stockpiling, even though comparatively, gold prices remain high.

Big money cannot find shelter in gold. There just isn't enough gold. Hence the current strength in the dollar. Who knows, maybe the dollar will remain strong. I doubt it. Current deflationary trends only make the relative cost of the huge American debt load, on a personal and governmental level even more unmanageable than it already is and debt is piling up faster than ever. The monetary base is expanding like crazy. The consumer doesn't see it because it's all being top loaded but it's happening, none the less. The level of American debt is such, that the only way out is massive dollar devaluation. 500% over the next few years would probably do it. The trick is to do it without destroying faith in the dollar and avoiding a 5,000% devaluation or 5,000,000%. Once you start inflation, it's difficult to stop and what tools are available to stop it with?

I don't believe that gold is a magic metal. I don't believe we are heading for a bleak post apocalyptic Mad Max future where oil will be fought over by deranged, motorcycle riding, mutant tribesmen. Gold is a stable form of universally recognized portable value. It is rarer now, on a per capita basis, than ever before in history. Soon, no matter what else happens, it will increase in value. Gold is money. It has been for 5,000 years. In 5,000 more it may not be. My investment horizons are not that long. Beaten down as they are, I will keep my mining stocks.