BUY BULLION - IGNORE THE SCHILLS

Everyone is touting their favorite get rich quick scheme with gold right now. Leveraged funds. Options on futures. Junior Gold Stocks. Here's a word of advice: all of those trades involve gambling with paper. Don't do it.

The whole reason you buy gold is to protect yourself against the rest of the world gambling compulsively and furiously with paper. To do that with your gold investment is the height of stupidity.

Here's a clue. Is someone predicting TRIPLE DIGIT RETURNS? That person is a crook, a liar or a moron. Or all three. Look, if anybody knew a way of getting triple digit returns without taking on triple digit risk do you think they'd be sharing it with you?

Here another clue: if you're looking for triple digit returns go to Las Vegas. You have much better odds than gambling your money on junior gold stocks. Why? Because the financial markets are filled with crooks, gamblers, liars and schills.

Yes, sure, some junior gold stocks will hit it big. Most will go under even if gold goes to 10,000 dollars an ounce. Why? Because they're run by crooks, gamblers, liars and schills. And if someone is swearing to you in print that some particular stock is ready to explode you can be sure that someone has loaded up and is looking to pyramid out on the backs of some greater fools.

Don't be that greater fool. I've been following the gold market for ten years and in that time not a month has gone by when some guru hasn't predicted the imminent explosion of junior gold stocks. It hasn't happened. For a good reason. And there's a good reason that GDXJ - the junior gold stock index - has gone nowhere while bullion shoots up. Because junior gold stocks and GDXJ represent and investment in paper.

If your interested in gold don't buy paper.

If you're interested in gold: buy bullion. Buy it regularly in a disciplined way regardless of price fluctuations, regardless of timing, and regardless of what some moronic pundits are saying about seasonally-adjusted-reversion-to-the-mean-historical-inflation-adjusted-blah-blah-blah metrics.

Don't buy gold to get rich. Buy gold to protect your wealth from the crooks, gamblers, liars and schills that have come to dominate the US financial markets - and, unfortunately, the US Government.

NEED MORE PROOF? CHECK THE HEADLINES THIS MORNING AFTER THE DOWNGRADE:

European Stocks Resume Decline, Miners Retreat

That's right, Gold bullion is up 50 dollars. Integrated miners? Down heavy. Pure gold miners? Up marginally. Juniors? GDXJ, which was issued at 25 three years ago is back up to 32. Wow. And check out where it is at 4:00 if the market sells off heavy.

WELL, WELL 4:00 UPDATE: GOLD UP 70 DOLLARS, GDXJ UP 16 cents. What do you know about that?