From stocks to housing to precious metals

We were out doing our civic duty in support of the economy today with another day-long trip to Costco - it didn't seem to help any as equity markets plunged again and the outlook for housing became even more grim, if that's possible.

Juxtaposed to the numerous "Avoid Foreclosure" signs and mixed in with the "Are you in over your head in credit card debt?" commercials on the radio were two commercials enticing listeners to buy gold.

You know that the public is starting to get involved when you start hearing ads on the radio which are obviously some company's scheme to separate you from your money while making you think that you're getting rich.

The one ad said something about gold paying a "dividend" and on the other one they said something like, "Own $10,000 worth of gold for only $4,000".

Odds are that their phone was ringing off the hook.

If you want to buy gold there are many ways to do it without lining someone else's pocket, but, then again, that's the way the system seems to work. Early indications are that the same sheisters who rode the stock bubble all the way up and the same people who rode the housing bubble all the way up are now selling gold to the public.

Apparently, that's part of our culture now. Of course it doesn't hurt when they can point to an article like this in the Financial Times.

Gold is the new global currency
There was a time when gold was money. In today’s uncertain world, the yellow metal is back in fashion. Bullion prices rose to a record nominal high after the assassination of Benazir Bhutto in Pakistan added to nervousness about the world economy.
...
The arguments for further gains in the gold price are compelling. It looks cheap, despite climbing from a low of about $250 a troy ounce in 1999, when central banks were selling reserves. The UK’s decision back then to sell 60 per cent of its official holdings looks particularly poor judgment.

Prices have a long way to go before they approach the inflation-adjusted record touched in 1980 when Soviet tanks invaded Afghanistan. At Monday’s $859, gold was trading at less than half that level. It could top $1,000 and still be at the lower end of what some analysts argue is a safe haven range.

While there are likely very few readers of the Financial Times in what is mostly farm country in this part of Northern California, it does lend the required credibility - an essential ingredient for much higher prices.

We are nowhere near bubble-status for precious metals, but it's time to start watching the public for signs that they are getting involved in a big way - when that happens (and when prices are much, much higher), that's when you want to start planning your exit.

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