After attending the 2006 San Francisco Hard Asset Conference this past week, I thought I would share some notes I jotted down while listening to the various speakers.

Notes from the 2006 San Francisco Hard Asset Conference 

While the background of the different speakers varies widely, the theme of their talks was much in the same. The general consensus I drew from the messages was as follows:

• Diversify away from the U.S. dollar
• Take a more global perspective in your investing decisions
• A recession in the U.S. seems highly likely in 2007
• Gold is going much higher
• Have some exposure to Chinese growth
• Base metals may have some downside, some consider it a bubble.
• The U.S. stock market will head lower. No guesses on how much lower were offered

Several of the keynote speakers had some very fascinating comments. Dr. Marc Faber of the Gloom, Boom, and Doom Report says the third world is financing the developed world, a condition that has never existed before.

Faber gave his two cents on the unsustainable condition of the U.S. debt structure, which now is growing much faster than GDP. He advocated owning the 5 major world currencies for diversification purposes including the U.S. dollar, euro, yen, renmimbi, and gold. He sees Russian President Vladimir Putin, who now controls the daily production of Russia's 10 million barrerls (more than Saudi Arabia), as the most powerful man on the earth. That's because Russia is now the largest oil producer in the world. He felt that investors should go long grains and short the Dow.

Congressman Ron Paul talked about the issues facing the U.S. government and the ultimate need for our country to go back to a gold standard. He is truly one of the few people in Washington that deserves the support of all Americans.

He spoke about "Rethinking the Draft". His belief is that an all-volunteer military is not only sufficient for national defense, but also preferable. It is time to abolish the Selective Service System and resign military conscription to the dustbin of American history. Five hundred million dollars have been wasted on Selective Service since 1979, money that could have been returned to taxpayers or spent to improve the lives of our nation's veterans.

Ronald Reagan said it best: "The most fundamental objection to draft registration is moral." The notion of involuntary servitude, in whatever form, is simply incompatible with a free society.

All in all, most of the speakers were bullish towards gold and the prospects for higher share prices in the mining stocks in 2007.

I, of course, follow that viewpoint and see the spot prices breaking out to new highs in the next month or so. I feel the spot metals prices will lead the mining stocks during this next leg up. This means our mining shares will most likely have a good first quarter in 2007.

At my workshop I spoke about the base metals representing more risk than the precious metals. Moving forward, base metals stocks represent more risk than precious metals stocks, even though base metal junior companies who are closing in on production in the next two years may continue to do well.

We could see a downturn in some of the base metal prices that have hit new highs in the past 8 months, but I don't see prices retreating to pre-rally levels. It is possible we could take a breather in the base metal markets, but as long as growth in China and India continue, we should see prices remain firm allowing low cost base metal producers to move their projects forward.

There is potential that a major economic squeeze to the U.S. could cause consequences to the world-wide economy and greatly slow the growth in China and India, thus lowering the need for the base metals used in infrastructure building

Keeping this in mind you should have some quality base metals companies in your mining stock portfolio, but the majority of that portfolio should be in the precious metals side. It simply is a matter of choosing less risk over more risk.

A good way to play this is to invest in base metal companies that also have a precious metals component. That way you are protected in whatever scenario unfolds.

Good Investing,

Greg McCoach and the Gold World Research Team
Editor, Gold World
Investment Director, Mining Speculator

P.S. The opportunities in the junior mining stock market have already proven to be huge winners for readers of my Mining Speculator advisory service. And I'm happy to say that the biggest gains are still to come. That means there's never been a better time to become a member of Mining Speculator, where you'll get the same kinds of tips and information that some people pay millions for. All you have to do is click here to find out how you can join the hundreds of now-wealthier Mining Speculator readers for a special low price. Check it out.

Media / Interview Requests? Click Here.