ANNUAL FORECAST for 2008 By:  Leonard Melman Published in “ICMJ’S Prospecting and MINING Journal   “When we look forward to 2008, several factors appear to be converging that could propel the precious metals markets sharply higher. These include many of the same items as last year such as higher crude prices, declining American Dollar, continued troubles in the various real estate markets and those financial instruments related to real estate, and a general decline in confidence in the economy, as noted earlier in this column by the recent Consumer Confidence index readings. We also note two powerful new considerations, supported by recent thorough documentation in the widely-read media, and while wide public coverage often marks a contrarian point of reversal, we don’t believe that will be the case for either of these important new and potentially powerful trends. First, Time Magazine headlined their study with the title, “The End of Spend.” The note that the American economy is facing a staggering array of problems, noting items such as, “…struggling banks, the collapsing housing market, the volatile stock market, oil prices, the weak dollar and lots of nervous investors in far-off lands.” They note that much of the consumers’ willingness to spend in recent years has been fueled by debt, but for many over-tapped consumers, that well is running dry. If it turns out Time is right and the consumer economy begins to lag badly, we believe the government will pull out all the stops available to keep the economy going, and that could spell monetary creation on a vast scale, further debasing the once-almighty U.S. Dollar - and leading to sharply higher gold prices. Second, The Economist magazine has just completed a study entitled, “The End of Cheap Food.” In it they document trends such as the loss of agricultural acreage to urban and industrial development, the diversion of food grain production into ethanol usage, growing affluence in Asia and Latin America leading to increased meat consumption, thereby putting additional stress on grain prices, along with the ever-growing population of planet Earth. There are no easy answers to this dilemma. Every one of the trends noted above is not only continuing, but is escalating and remedies such as price controls simply don’t work, but only result in empty shelves - as the ‘Economist’ notes is the case in Russia. Clearly, greater inflation is a risk, plus the exacerbation of the difficulties of the consumer who will be able to participate even less in the consumer economy if foodstuffs consume a great and greater amount of his/her discretionary income. Therefore, we look to 2008 as a year when escalating troubles become visible to the entire world, with the potential for a major public rush into the precious metals by late 2008. While risky, we therefore see the following peak prices for the three major precious metals during the latter portion of 2008: Gold - $1,500 per ounce Silver - $25.00 per ounce Platinum - $2,000 per ounce. We Shall See