Subscribers will be aware that we recently increased our gold weighting from 5-10% to 10-15%. We have become increasingly concerned that investment risks, both short and long term, appear to be rising. This reflects four major issues: 1) an extraordinary over-indebtedness in the rich world (OECD total public debt is over 96% of GDP in 2011); 2) the near-certainty of well below normal growth due to public and private deleveraging and the continuing long wave economic decline; 3) a seriously flawed international monetary system and eurozone structure; and 4) dysfunctional politics and profound lack of leadership in Europe, the U.S. and Japan.

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