BUY THE DIP

  I really think it's a great time to buy gold. It's down to $1555 per ounce, down from $1900 at its peak last summer, and it's past few months range of 1600-1750. I acknowledge that short term upward pressure on the dollar due to the failures in Europe could drive the price of gold down even further. But this pullback is a great time to get in. Plus, we will no longer see prolonged dips in gold below our current range when markets finally realize that the dollar is actually in worse shape than the Euro. If I could buy gold now, I definitely would buy some. Then I'd buy more in a couple of months. I don't pretend to be able to time markets, but I am bearish on the medium term for the US government's ability to start getting serious about spending, so I am confident that the price of gold will be substantially higher in future years. Even if it takes it many years for the problems with the Euro to play through, the Fed will probably assure that the effect of inflation in the dollar will at the very least mitigate the effect of Europe's problems on exchange rates and commodity dollar prices. Consistent accumulation and cost-averaging will work well for you if you share my views on the economy.

  For reasonable premiums and low spreads, I recommend Krugerrands and gold bars such as these from the Perth Mint.

  Oh yeah, silver could be considered even more attractive than gold right now. The Au/Ag ratio is about 55 to 1. It has been higher and lower than that after the US demonetized gold in 1933. But for some perspective, in the US during the nineteenth century, the ratio was about 16 to 1.

  Small time investors and gloom-and-doomers should buy some 90% silver coinage (pre-65 dimes, quarters, and halves) at less than a dollar over spot per ounce of silver, sometimes just a few cents over spot! The buyback may be a little lower than for 1 oz bullion such as Eagles, Maple Leafs, or generic rounds or bars, but they could be great for barter in the worst case scenario that the currency collapses. You could also get 1 ozers as I just mentioned, and as a pure price-speculative investment in silver at a low premium and small spread, consider 100 oz bars.