Okay, okay the title lies.

Because Ken and I have owned gold through the SPDR Gold Trust (GLD) for a long time, we've made money in gold's record run and will continue to do so for the foreseeable future. So, we are happy about the rise in prices.

But there is a very important story that the rise in gold is telling us so I want to be sure you hear it.

The record price for gold futures comes with a cratering U.S. dollar.

Although later denied, an article in the UK Independent reported that China and some Middle Eastern nations have been in talks to consider abandoning the pricing of oil in U.S. dollars and using a new basket of currencies, sans the dollar, for oil purchases.

Just the idea of losing our position as the safe haven currency to the world was enough to cause a sale of dollars worldwide.

Since there really is no other paper currency that can be trusted as a safe haven, gold wins by default.

It is solid and its supply is finite; ergo, it is VALUABLE.

The more historic rationale behind the current and ongoing strength of gold may, at the moment, the hidden, but, still holds true.

Gold is a hedge against inflation. We talked recently about needing to prepare for coming inflation. The U.S.'s continued over-spending and printing of worthless paper will reap a mess of unintended consequences and real pain for those of us who live our daily lives in dollars.

The profligate spending of our government through bailouts, wars, welfare, health care plans and crap-I mean cap--and trade has brought the dollar to the very tipping point of complete and utter insolvency.

Like Wiley Coyote, we have already one foot suspended in the air as the ground crumbles beneath the other.

How can Mother Government keep from pitching us over the side?

By wiping out the unsustainable, un-payable debt with raging hyper-inflation which will make our financial obligations, based in today's dollar value, ever so much cheaper.

The less each dollar is worth, the smaller the debt becomes.

Here's how it works:

A sweater with a price tag of $500 seems expensive when you think of buying it right now.

Leaving that $500 sweater on the shelf for the moment, a new batch of sweaters comes into the store with the new inflation-adjusted price of $1000.

 The next time you need to buy a sweater, you’ll buy the $500 one because it's now a “bargain.”

That's sort of how the government plans on dealing with the debt.  What you can't pay... inflate away.
 
This is the bigger story behind the price of gold.  When all this paper we carry around with us worth almost nothing, we'll need something “real” to pay for what we need from this global economy.
 
Owning gold will be the answer.

If you haven't heeded our past calls to buy gold over the last year, don't jump in with both feet now at record prices! 

There will be pulled backs in gold prices.  Nothing goes straight up in the investors in the investing world.
 
Start buying on pullbacks and do it in increments, not with a lump sum.
 
We're headed for $2000 per ounce gold by 2012.  You need to be there.