Gold prices have edged up on continuing worries over the health of the U.S. financial system and the a limp dollar.

Reuters reports that spot gold “was at $964.00/965.00 an ounce at 0951 GMT from $963.10/964.10 in late New York trades on Wednesday, when it fell more than 1 percent after oil prices tumbled.”

Gold and silver have been on a tear lately, says Taipan Daily editor Justice Litle. Soon the Fed is going to get carte blanche to ’save’ Fannie Mae (FNM) and Freddie Mac (FRE). You want to have a signicant portion of you portofolio in the yellow metal when they do…

As you may have noticed, gold and silver have been on a tear lately.

The good news is, it’s not too late to protect yourself — and get some big upside to boot — by buying gold. The uptrend in gold is still in early days, and the most spectacular gains are still a good ways off.

Why am I confident in saying this? Well, for one thing, We’ve been making the golden case in Taipan Daily for a good six months now… and in other venues long before that. Events have been playing out like clockwork thus far.

The Acid Test

There is a simple way to test whether a “thesis” is working, or rather, whether one’s big-picture views on markets are holding up.

If new developments, current events and ongoing facts on the ground continue to support your view, that suggests that your thinking is correct. If the thesis keeps getting blindsided or challenged by new events, though, that’s a sign that the thinking is off track.

Not to pick on them too much, but take Barron’s for example. Barron’s has served up multiple bottom-picking covers over the past six months, and every single one got whacked by Mr. Market.

Just off the top of my head, Barron’s readers were urged to buy financial stocks like MBIA (NYSE:MBI) and AIG (before they were cut in half yet again); they were told to buy General Motors (before the stock plunged and hit a 1954 low); and they were told more than once that it was time to be bullish on stocks overall (nope).

Now Barron’s is telling us “Home Prices Are About to Bottom.” I don’t know about you, but their enthusiasm doesn’t give me much comfort.

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Calling the Tune

In comparison, when it comes to what’s happening with gold, inflation and the financials, just look at a few examples of what’s been said right here.

• In April we wrote, “Neglected Gold Could Be a Monster Buying Opportunity”… and gave a number of reasons why. Gold is up about $100 an ounce since then.
• Six weeks or so ago we called Lehman Brothers “the new bellwether for financial stocks,” adding that, “If [Lehman or the Philly Bank Index] cracks, there could be another big downward whoosh in the financials.”
• In a mid-June piece titled Wall Street Fiddles While America Burns, Adam Lass observed, “The financial sector… has given up some 41% over the past 12 months… It is not done yet.” (Underscore emphasis his.)
• In March we talked about “The Fourth Branch of Power: How the Fed Is Set to Become More Powerful Than the White House.”

That last one might have seemed a little breathless at the time — but not so much in hindsight. Again, just look at how things are unfolding. As the markets wait to see which major bank will implode next, the idea of Fed as “Supercop” is gaining ever more traction.

The Fed and Treasury will soon be granted the right to purchase “unlimited stakes” in publicly traded companies like FNM and FRE. The general consensus is that there’s no move too drastic when it comes to saving the “system”… and so it’s only a matter of time before the Fed gets carte blanche to carry out its mission by “whatever means necessary.”

Source: As Financials Implode, It’s Not Too Late to Buy Gold