Fellow Resource Prospector,

The Federal Government is even more clueless than I previously suspected.

I’m speaking specifically about a White House commission’s Federal Deficit Reduction plan.

Surprisingly, the White House released this plan earlier this week.

I say “surprisingly” because the plan is so weak, so obviously ineffective - that anyone with the intellectual capacity to know how to read should be completely outraged at this plan.

They should have never let this plan see the light of day.

America's Lost Decade. And it's led many investors to conclude that the American economy is broken and that investing for growth is a fool's errand. Maybe you've felt this way yourself from time to time.

After all, how will America overcome 10%+/- unemployment?

$1 Trillion+ in annual budget deficits?

Record home foreclosures?

And most importantly, how can you, the individual investor, profit in the midst of this?

Invest in quality American companies, and buy their stocks at a discount. You can never go wrong investing in Great American companies, especially in times of crisis.

*****So, the answer to the question “Why buy gold and silver now?” is still:

The Federal Government is completely unable to comprehend the importance of deficit reduction to the overall strength of the dollar, the economy, jobs or any other fiscal, monetary or economic trends that will make things better in the long run.

Until the Government realizes, or is forced to recognize the importance of under-consuming, the importance of savings, and they adopt policy that places importance on having a strong currency, then gold and silver will remain obvious alternatives to holding the dollar.

We’ve seen a massive run-up in the price of nearly every asset over the past four months. That includes commodities like gold, silver, oil and corn - but it also includes stocks.

Before we celebrate our good fortune from seeing nearly all our commodity and stock holdings rise, we should consider that they’ve risen commensurate with the erosion of the dollar’s purchasing power.

And while we can pat ourselves on the back for getting our dollars out of harm’s way, we’re really not substantially richer than we were before.

And in fact, it’s unlikely that we were able to shelter a significant enough portion of our net-worth in order to guarantee that we HAVEN’T seen the value of our total assets shrink.

In actuality, shrink is the wrong word.

We’ve had them stolen. When Government’s weaken their currency to pay for bread, circuses, debt and airplanes, they do it at the cost of their citizens.

Without a vote, a bill, a discussion or a press release, the Government simply transfers a portion of the value of every dollar into the hands of the beneficiaries of Government spending.

*****In the short term, we may see a correction. The dollar may strengthen.

But remember the long-term trend: the Government is either incapable or unwilling to stop deficit spending. Until that trend reverses in a significant way, physical gold and silver will remain strong alternatives to the dollar.

Likewise, gold and silver stocks will continue to rise.