Question: Hi Dave,

I want to first of all congratulate you on your work and your Web site. It is very useful.

I recently decided to hold back from purchasing a home at the moment and wanted to use cash down on stocks you recommend. I have been studying an entry point. But on the way to making my move, Mike Maloney, who I do follow as well, mentioned in the near future we may see a crash in the market (even if it is propped up by Ben and friends it still losses value). Now my question is, will the silver stocks perform as well as silver even if there is a deflation? Or will the mining stocks be in jeopardy as well as all the general market? I remember Mike Maloney said in his book, in the depression mining stocks outperformed the market.

Thanks for your help.

Steve

Comment: No one knows for certain, not me, not Mike.

I do think if we got a huge crash in the general stock market both gold and silver stocks would follow the market down. They are stocks after all. However, if the sell-off is more moderate then the mining shares would fare better. Mining shares did do excellent in the last depression. During the crash of 1987 gold stocks were among the first to recover.

If you have bought for cash and held, even in a downturn, history would indicate that you would come out okay. Now in my view, your personal living space is far more important than picking the right mining shares.

Real estate has sold down a great deal the past few years; many of our picks are way up. Perhaps you might think of what is low and what is high, currently. As we know, buying low and selling high seems to work. Longer term real estate generally will be going down and precious metals higher, it is just seeing people wait (sacrifice) too long for a home makes me uneasy.