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I sense we are very close to breaking out from the nine-month correction in gold and silver.  The verdict will be in when gold tops $1630 and then $1650.  Some analysts are waiting around for gold to cross over $1700 before they tell you to buy, but that’s waiting way too long, in my view.

The world is awash with debt – and with money too.  Even more money needs to be “created” (QE) in order to service the debt.  By its very nature, money does not like to just sit around; it needs to grow, to make a profit.  Whether the money is controlled by a bank or fund manager with huge amounts to invest, or by a regular guy or gal like you with a little to invest, the challenge is the same.  Where do I park my money?  Where can it go and both be SAFE and earn at least enough to beat inflation?  It used to be that if you had lots of extra money you would buy bonds and “clip coupons.”  The first time I heard that saying was in the early 1970s.  Susan and I were having lunch at the Lincoln Del in St. Louis Park and we were talking with a man sitting at the table next to us.

At some point in our conversation, I asked him, “What do you do for a living?”

He replied, “I clip coupons.”  In 1972 you could do that with your money.  At that point in my life, I had no idea what a Zero Coupon Bond was, but his statement piqued my interest.  Frankly, today, only a fool would be sitting around clipping coupons from 30-year bonds!  But you could do it 40 years ago.  Times have changed.

In 2012 it is hard to get by clipping coupons.  Interest rates are too low (especially in relation to inflation).  Other than “parking” your money in some form of interest bearing account for a short period of time, it is not a sensible option.  The next option is the stock market, but there is too much uncertainty and risk to do anything other than “token” investing there now, at least if you are adverse to risk.  Real estate is far, far from a bottom and off the radar screen for most people now, as it should be.  Add it all up and what do you get?  No bonds, no stocks and no real estate!  What’s left?  You could do worse than parking your funds in gold and silver, especially at these prices that have suffered through nearly a year’s worth of correction.

Could the metals fall further?  Of course they could, but I suggest not by very much and certainly not for very long.  If you want to bottom-feed and pick the lowest possible entry point, I can’t help you.  I honestly do not know where the bottom is, but I do know that anyone who adds to their “ounces” now will not regret it.  And since there are no other sensible alternatives, gold and silver become even more of a logical choice.  The bond market has only one way to go and that is DOWN.  If interest rates (now at zero) can’t go lower then they can only go higher.  Not a good time to be in bonds.  The Dow (as a proxy for the stock market) is in no-mans land and could drop 50% as easily as rise a bit.  Check out Mark Lundeen’s article on gold and the Dow in today’s daily.  Richard Russell is scratching his head?  His instincts tell him that the Dow should be falling but the hard evidence isn’t clear – yet.  Russell goes by Dow Theory and so far, he has no clear signal, but he is going by his “instincts” and he advises his faithful readers to keep all their money in physical gold and cash – not stocks.

I realize you would like answers.  What should I do?  When should I do it?  The first part is easy – load up on gold and silver.  The second part is more difficult.  No one and I mean no one can tell you exactly WHEN to buy.  But I can tell you that you will not regret buying at these prices.  If you wait for a lower price, you may end up spending much more if the price suddenly turns up, and it is very possible that it could.  Anyway, what else can you do with your money that makes any sense?