On Friday, Congress passed the administration’s pork-laden bailout bill. Today, the Dow has plummeted by over 500 points. London’s FTSE plunged the most since 1987.

So much for the government ‘fixing’ the financial markets. Mr. Market simply isn’t buying the bailout.

How should investors react? Outstanding Investments co-editor Byron King says the answer is physical gold and precious metals mining shares.

This from Penny Sleuth:

Let’s think this through.

Have you tried to buy physical metal lately? Good luck. The U.S. Mint is all but sold out of coins. Indeed, the U.S. Mint has placed its dealers on allocation. The Royal Canadian Mint is working flat out to meet the demand for Maple Leafs. And South Africa’s Rand Refinery — which supplies the world’s most popular gold coin, the Krugerrand — is now running at full capacity seven days a week. Got gold?

Many gold and coin dealers are having trouble keeping bullion materials in stock. For example, I’ve had about 20 or so telephone calls in the past week from “old friends.” These are people from my past (and a few total strangers) who know that I write about gold, energy and resources. The common question is, “Byron, what do I do with my dollars?”

On a purely private basis, I’ve been referring some of my friends to a couple of metal and coin dealers that I’ve used in the past. I contacted the manager of one firm just to say that I was referring people. He said, “Byron, I appreciate the referrals. But I’m almost out of gold to sell. I’ve got high-end numismatics. But those are gold coins with a serious markup. Further down the price level, I just can’t keep bullion coins or metal ingots in stock.”

So what’s the story for physical gold? There’s strong demand for real metal. According to today’s Financial Times, “Investors in gold are demanding ‘unprecedented’ physical levels of bullion bars and coins and moving them into their own vaults as fears about the global financial system deepen.”

What do these gold investors know? Evidently, the posted price for gold is low. It’s another way of saying that gold is underpriced relative to true demand. In fact, the posted price is clearing the market like a vacuum cleaner.

*********************************

Suddenly, everyone’s talking about GOLD. But what they don’t know about are “Vancouver LEAPERS.”

Here’s how to use “Vancouver LEAPERS” to make huge gains in the coming blowoff phase of the gold rally

The last time we saw a gold market like this, some investors made 971%, 2,464% and even 3,987% with little-known “LEAPER” stocks. Grab your LEAPERS today…

*********************************

Meanwhile, says Byron, “$700 billion of new money will dilute the buying power of every other dollar already in circulation. It’s basic economics. And it’s almost the textbook definition of inflation.”

So that’s why people are buying gold. And that’s also why — in a volatile market — it’s probably a safe long-term bet to pick up precious metal mining shares now. Could the shares still go lower? Sure, anything can happen. But will the U.S. dollar keep on losing purchasing power? As surely as night follows day.

PS: Byron’s  readers are positioned with 11 precious metals plays. They also have six infrastructure companies, seven alternative technologies stocks, six straight-up power generation/technology plays, and 14 oil and gas picks. Byron says that this is such an important time to get involved with these things that he’s put together a free report on commodities investing.

Source: Precious Metal’s Bailout Bonus