By Chuck Butler

As I said, until these credit markets unlock, the markets will focus on the crisis and not the awful fundamentals in the U.S. economy. These awful fundamentals need to rise to the top again for risk takers to return to the markets.

Until we get risk takers back again, the dollar will continue to put all currencies and commodities like gold in a corner.

But that also means that right now is the best time to buy gold ahead of the next recovery. Buy cheap now, and hold it until Paulson and his boys can get credit moving again.

So why gold? Let me explain…

Yes, it may surprise you that I believe in gold as a currency. But I do. In fact, gold is still the world’s oldest currency. It’s still the currency most people run to during times of geopolitical tensions and inflation.

“Johnny Come Home Syndrome” Steals Gold’s Thunder…for Now

Of course, none of that has mattered lately. Gold has fallen from its high of US$1,038 vs. the dollar on March 17, 2008, to US$720 as of yesterday.

So what's happened? I call it the “Johnny Comes Home” syndrome. Essentially, the credit markets squeeze hit home in September. This was right around the time that Lehman Brothers closed and the Fed bailed out Fannie Mae, Freddie Mac and AIG. All these events sparked the unwinding of "non-dollar" investments to bring "home" dollars for the coming rainy days.

Since summer, we've seen gold drop, oil drop from US$145 to US$58. Stocks drop 30%, and currencies, as measured by the dollar index, drop 14%. Add to those losses, the losses in housing, and you can understand why everyone is flying to the only thing rallying – cash.

But as I said, once the credit markets stabilize, the markets will be able to focus on the awful fundamentals with the U.S. economy.

In addition, with the Fed leaving interest rates at historic lows, and most likely cutting rates even further, inflationary pressures are soon to regain their foothold in the U.S. economy. This is when gold will shine once again.

When will this happen? No one knows for sure, but given the amount of stimulus, low interest rates, and money supply I have to believe that credit markets will unclog soon.

So the idea is to look to buy at bargain prices. Buy low, sell high, right? If that’s the case, you may never find this great of deal for buying gold.

Looking forward to brighter days in the credit markets...