As you all know, we are caught in of the nastiest economic downturn since the Great Depression, with unemployment suspended at around 8% nationally, and much higher in states such Florida, California and Nevada. In the late summer of last year, the US, for the first time in its history, saw its credit rating downgraded after a battle over the budget in Congress. Of course, Wall Street and stocks have always been iffy and real estate is only on its first step to recovery.

Gold and paper money parted ways when the US officially went off the gold standard in the 70's. The dollar backed up by precious metals became a thing of the past and continues to decline in value every year; it has already lost 30% of its purchasing power. This is the reality of fiat currency. Simply printing money to cover U.S debts floods the market with weaker dollars. When we decided to sever the bond between paper currency and gold and to allow the two to fluctuate independently of each other, the penalty was inflation.

Gold, however, has retained its purchasing power over the past 50+ years. In 1961, when the US was still on the Gold Standard, one troy ounce of gold was worth $32.25. Ten years later, after the abandonment of the Gold Standard, it had risen to only $40.62. By the late 80's, gold attained to a fleeting high of $447, only to retreat to $271.04 by 2001. In 2006 gold prices soared once more, this time to a jaw-dropping $603.46. By 2011, it was twice as much. As of August 20th 2011, one troy ounce of gold sold for about $1,800.

The gold-to-dollar ratio continues to decline as more money is required in order to buy less gold. And as the dollar weakens in comparison to other national currencies, we can expect gold to go up even more.

Gold and silver have proven their trustworthiness. The fact that their prices are at a record high is no excuse to delay buying in as a way of shielding yourself from the badly ravaged dollar. In fact, it is actually best to buy now before prices increase again, as everyone anticipates they will do for the foreseeable future. No one can predict with certainty how much further the dollar and stocks can decline, but the gold-to-silver and dollar-to-gold ratios have always been reliable indicators of gold prices. Of course, gold will eventually reach a high and then decline in price, but history teaches us that over the long haul, gold remains a steady "crisis commodity," retaining its value and defying volatile market forces. You can always rest easy in the knowledge that even if gold prices fall, they never fall the way the dollar does.

We are still in the middle of a long climb upwards. Precious metals are not bubbles. Protect yourself against financial uncertainty: diversify your portfolio with a precious metal component.