Mining stocks: one heck of rebound to be expected

HAPPY NEW YEAR!
2011 has passed and it is history now. While we did have seen a Santa Claus rally during the year end, it was not as much an extent as I had expected for. However, I do expect that the relative bullishness will continue at least for a few days during the first week of a year.

The sentiment for precious metals, gold and silver, is extremely low at the moment. It is not exaggerating to say that there is blood on the street. Based on what I have read, there are 3 major reasons for the significant correction of this round for gold and silver: governments and bigger banks running for cash due to their severe liquidity problems (in other words, they are too much indebted and need cash urgently to plug the holes. Gold and silver are the only source left for them to cash out without borrowing); US$ appreciation, especially against Euro; and price manipulation of commercial banks to try to alleviate the losing of their short positions. Fundamentally gold and silver should further increase in their value due to the huge debt problems in the developed world that will definitely lead to currency debasing and hyperinflation down the road. Needless to say, the lower their prices, the better opportunity for brave investors. However, currently the much better value is lying in mining stocks, although with higher risks. I cannot say for sure when but I think it is very close, in days likely, that we may see one heck of rebound of stocks for gold and silver mining companies. It is just too depressed right now for such companies and everyone simply throws in the towel to run. No, it is not the time to run away; on the contrary, it is the time to get in. That is what I'm doing.