"There are hardly any gold mines of size scheduled to come on stream ... and we are not talking about just over the next year or two, but ever. Most people in the know see annual gold production falling from here on.

"For proof, despite the incentive of higher gold prices, South African gold production in 2006 dropped to the lowest level since 1922. South Africa is, of course, the world's most prolific gold producer.

"And, above ground, there just isn't much gold to go around either. The U.S. government, for example, possesses the world's largest gold reserves ... and those reserves amount to only about $170 billion at today's prices ... not even a rounding error on the trillions of dollars in debt the government has guaranteed.

"Put simply, the amount of gold available to investors and central banks is like the number of beachfront home sites at Malibu -- it's not going to change much. As a result, when the rush for the lifeboats begins in earnest, the upward pressure on gold will be unimaginable. As will be the profits for anyone who acts now, ahead of the crowd.

"If you haven't yet started accumulating precious metals, you still have time. Start by picking up some bullion coins from a reputable dealer (silver should do as well as gold).

"Then build a portfolio of the better small companies exploring for new deposits -- the ones with the best management teams, working on the best projects, in the best geology. These stocks are the true profit gems -- in part because of an accident of recent history.

"During the long bear market that ended in 2001, the large mining companies all but eliminated their exploration departments. Now they urgently need new deposits to restock their declining ore reserves.

"But rather then scouring the world themselves, the majors let the more agile and entrepreneurial junior explorers -- often Canadian firms, due to the resource orientation of that country's economy -- invest the capital and sweat needed to find a new deposit.

"Then, when a junior company's project seems ripe, the majors compete to buy the deposit or to acquire the junior explorer itself -- and they pay up in a most serious way.

"While there's no such thing as a sure thing, there are times -- like now -- when the deck is heavily, massively, stacked in your favor.

"You are, therefore, left with a relatively simple choice. Do nothing and hope that all the world's troubles just drift away -- and risk personal financial disaster if they don't. Or take action, if even with a modest share of your portfolio, and position yourself for extreme profits.

"We currently like Alexco Silver (TSE: AXR), a Canadian silver play, and AuEx Ventures (CVE: XAU) a relatively new company with a focus on Nevada that is run by Ron Parratt, a member of the Explorers' League that while working with major mining companies has led teams responsible for finding over 20 million ounces of gold in that minerally-endowed state."