"In case you missed it, here is last quarter's GTI letter to shareholders. "The point about the LT inflation chart at the end is that you have NO chance of beating 7% "middle class" inflation in real terms UNLESS you are 100% in shares, based upon history. Maybe it's different this time.

"Thanks your comment on Ballarat etc....a reminder that a good trade is a comb of 2 actions, a good buy and good sell (I'd quite forgotten about your pa position) I thought you might like to see my private copy dated 12/5/10 sent to IPM re my 3 gold stocks and how to look at gold mines....see the 5 criteria....my buying levels were some 10% below the then prices and we got filled for the first third on the recent dip (the charts were spiky....pls note we always use Fullermoney charts in our work). Many of your subs will have MADE and LOST fortunes in non gold earning juniors, so might be int to read about mid cap / producing mine investing....you know the psych background...extreme pleasure in winning and extreme confusion in losing.....and never REALLY knowing why either happened in the first place....."

David Fuller's view On behalf of Fullermoney and the Collective, thanks for this latest copy of GTI which is sure to be of interest, not least for your sensible 5-point criteria when venturing into the minefield of gold shares, in search of likely winners.

I certainly agree that middleclass household inflation, in terms of the goods and services that we pay for each month, will be at least twice the reported CPI figures on average. We can protect against this over the long term with a successfully managed portfolio of equities and some gold during its secular bull trends.

I also like collectibles as an inflation hedge and have often written about these in the past. However, most collectibles are illiquid; buyer's auction commissions at Christie's and Sotheby's are now 25% for the first £100,000 and there is VAT on the commission; retail dealer mark-ups are often stratospheric. These costs are unlikely to vary significantly in other developed countries.

Consequently, one should only invest in collectibles that provide a yield to the spirit. I like pictures, sculpture and bling for Mrs Fuller. If you like art a good dealer can be useful, but being somewhat oversupplied I only nibble occasionally these days, buying mainly at auctions or occasionally from artists. I only buy jewellery at auctions.

Will collectibles appreciate in value during a disinflationary environment? Probably not but slumps provide the best opportunities to accumulate at sensible prices. Also, the stronger economies are experiencing far more inflation than deflation. For price appreciation, my guess is anything that Chinese and Indian collectors like which is at least 100 years old.