And as for buying gold:

“[The] view that gold will see a substantial re-valuation is correct but it may take a detour back to $400 or lower – simply because in the deflation to come, which will be brought on by an escalation of the current liquidity crisis, gold will be sold off to pay for margin calls. Gold will be re-valued in the future because it will most likely come back into service again as the standard against which all currencies will be measured. This accelerating crisis has been brought on by banks by-passing the prudential requirements through securitization of mortgages and by the use of massive leverage on the part of borrowers to magnify the gains made from the consequent asset inflation. Credit creation (money supply) has been on a tear for a decade or more because banks were able to keep the loans off their balance sheets through securitization. This process is now in the early stages of reversal.
 
“Most of what we read about in the financial columns today was brilliantly explained by Robert Prechter (of Elliottwave International) in his best seller of 2003 Conquer the Crash . As far as the equity markets are concerned, he was wrong in nominal terms because they continued to rise until last October. In terms of gold, the Dow, S&P500 and NASDAQ have all been falling since 1999. His explanation then of the likely unfolding of events is closer to what is happening right now than any other commentator present or past. Inflation is NOT the issue. The markets know it (why else would US bonds and Treasury notes be in such demand) and the Fed (as always) is following the 3 month US treasury bill down the lowering yield path. I believe that the US Treasury market is telling the real story.”