I'm pretty busy with other things at the moment, but current events are too important not to deserve a post.

I expected the initial collapse at the height of the boom, and I knew a bounce was inevitable. The length and size of it has surprised me, but then the insanity of governments is difficult to accept. And many governments have acted with almost ultimate insanity.

When you max out on your credit, the answer is simple, cut back on spending, pay off your debts, and maximise income.
What you don't do is go on a spending spree and hope for the best. Unless you see no way out and you think one last party can't make things any worse than they are already.

Well, I think the head in the sand party has ended. And now it's time to face the music. The death march.

But it's not all bad news, at least for those who appreciate how the system works.
I'll start with gold. The gold market is schizophrenic. There is the real physical gold market, and on top of that, acting as the insane main ego, is the paper gold market. The one controlled by the big money players. The speculation in the paper market has reached high levels, and all too often that gets reversed, with the inevitable result on the gold 'price'. Really the exchange rate between the paper currencies and gold the real money.

I don't care about the speculators, but for those who wish to protect their wealth, the gold market has now entered a buying zone. Anything under GoldUS$=1100 is a buy 'price'. For those already protected who wish to "top up", who may wish to try and get the best exchange rate for their paper, there is a little way to go, but I think not that far.

Hopefully everyone who has any wealth to protect has at least opened an account with these two:

Bullion Vault ......... and ......... Gold Money

If not, why not?! It only costs a little of your time, and gives you close to instant access to real physical gold which you can buy and have stored for you safely.
More info here:

Why & Where to buy Gold & Silver
http://neuralnetwriter.cylo42.com/node/2535

Of course how you view exchanging your paper currency for gold depends on what paper you hold. If you have US$ or JPY, then the buying opportunity is probably getting close. But if you have one of the currencies recently pushed up by speculators, the buying time has passed. For those with NZ$ it was a little while ago:

But with the NZ$ dropping, and GoldUS$ also dropping, it's not too late. But when gold reverses and starts up again and the NZ$ continues to fall, then it will be too late.

This is my chart station view of the currencies and precious metals:

As I've said before, I find the picture simpler when comparing with the JPY.
You can see the overall picture, the trends, and the curves.

Here's the Euro against the JPY:

The GBP against the JPY:

The NZ$ against the JPY:

With my prediction zone:

I doubt the US$ Index will bounce anywhere as much this time, which also implies to me that gold and silver will also not drop as much.

Now again is a time to take care. Keep some spare cash on you for emergencies. Keep an emergency store of food, water and important items. That's common sense for those in NZ anyway, with the risk of an earthquake.

And to keep this in context with where I think gold is going:

I'm keeping a close eye on that white 20% line.

I meant to write a big article on the Golden Pyramid, but I simply never got time.
In very simple terms this pyramid shows how the system starts with real money, gold.
Then money substitutes are used, receipts for gold. Like when the US$ was redeemable for gold.
Then money illusions start to be used. These are not redeemable for gold, and are built upon lower levels of the pyramid.

The pyramid grows during the credit expansion phase.
Eventually the growth phase comes to an end, and the top layers of money illusion start to collapse, as we have seen.
People seek lower levels for safety. There is a flow down the pyramid.
This continues, until eventually the currency collapses, and the final layer of money illusion evaporates, just leaving the original real money at the bottom, gold.

I mention this because of this:

Piling Into One Month Treasuries
by Trace Mayer, J.D. on January 28, 2010
http://www.runtogold.com/2010/01/one-month-treasuries/