Now, to gold and silver: I can’t even begin to tell you how many readers disagreed with me on my short-term views on gold and silver (and any other commodities for that matter).

But now, gold and silver, in defiance of outright bullish fundamentals, are doing exactly what I said they would do and are breaking down.

Gold has plunged below critical support levels at $1,780 and $1,763 and is now ready to make a beeline toward the support levels I’ve been giving you, republished here for your reference.

The first target is $1,611. If that should give way, look for the next support level at $1,567 to be tested. If $1,567 gives way at any time, a steep drop to the $1,432 level will unfold.

Keep in mind the bull market in gold is not over. Not by a long shot. In fact, when you step back and look at the big picture, a sharp decline in gold would be perfectly healthy market action that would be more bullish longer term than bearish.

After all, gold’s latest leg up took it from the $1,165 level to $1,921, a huge $756 rally. A normal 50% retracement would bring it back to the $1,593 level and a two-thirds retracement, still normal, would take it back to the $1,422 level.

If you’re long gold, I do not recommend selling your positions. I do however recommend hedging your gold via purchases of an inverse gold fund such as the PowerShares DB Gold Short ETN (DGZ).

I suggest lifting that hedge if gold finds support at the $1,567 level by penetrating it and closing back above it, or if gold somehow manages to rally and close above the $1,880 level.

Silver is crapping out. It has broken weekly support at the $41.14 level and is now trading below the $38.86 level, an important bearish signal I gave you in previous columns.

Silver is in danger of collapsing, first to $34, then even lower, to the $30 level. I’ve republished my key support levels here for your reference.

I also repeat my warnings: Don’t touch silver with a 10-foot pole. Sell it short only if you can afford the risk … you can handle the emotional swings in silver.

Otherwise, wait for my recommendations to buy silver and silver miners, when the dust settles.

Now, the U.S. dollar: By this time next year, or sooner, investors all over the world will find out that the U.S. dollar is NOT the safe haven they thought it was.

But right now, there’s no disputing that as investors worldwide panic and liquidate assets, the dollar will continue to rally, almost by default.

You see, the amount of dollars in the world, physically and electronically, simply overwhelm the available supplies of all other asset classes.

In other words, even if all the money in the world wanted to go into, say gold, or U.S. stocks or bonds, or European stocks or bonds for that matter, it couldn’t. There’s not enough gold, not enough stock floating in the world, and not even enough bonds in the world.

So when investors are frightened and liquidate other asset classes, they inevitably go to cash and convert their money almost automatically to dollars. This gives the dollar an inevitable pop higher.

And it’s especially true now since no one in their right mind wants to hold euros either!

So in the short term, I expect the dollar to continue to rally. But as I’ve pointed out many times in the past, the dollar remains in a long-term bear market and when investors wake up to the fact that they jumped from the fire (Europe) into the frying pan (the United States), they will dump dollars yet again (and move back into tangible assets).

But that time is not here yet. Indeed, as the dollar continues to rally, that too will put more downside pressure, short term, on commodities.

Including, oil: In my last several columns I’ve been telling you that oil would be rolling over to the downside.

I also told you to expect oil to plunge to as low as $80 in the weeks ahead and not to buy any oil and energy stocks.

I also suggested that you consider short positions in oil via inverse ETFs such as the ProShares UltraShort Oil & Gas (DUG) or the PowerShares DB Crude Oil Double Short (DTO).

If you acted on those suggestions, you’re sitting pretty. Those positions have surged as much as 33.93%. Plus oil has now broken key support at the $83 level, and I believe it can fall as low as $67. Hold those positions. Take profits when oil hits the $67 level …

Next, Asia: Don’t believe the pundits who claim that China, and Asia in general, is headed for a hard landing. That’s pure bunk.

Asia remains the only corner of the globe that has real, inflation-adjusted economic growth and that’s not going to change anytime soon. China, as usual, leads the pack …

Fixed asset investment is running at a 23% to 25% annual growth rate.

Manufacturing activity has expanded at a 32% rate through August.

Profits of industrial firms are up 28% year-to-date.

Beijing’s tax revenues are up 31% so far this year (while government expenditures for this communist country run at 23% of GDP, far below U.S. government expenditures of 40%!)

And more. In fact, I see no evidence, either in the stats, or anecdotally living here in Asia, that this corner of the globe has anything but robust growth ahead.

Yes, Asia’s stock markets are softening, as all equity markets are. But unlike the West, the pullback occurring in Asian equity markets is a buying opportunity.

I’ll have more updates on Asia for you in the near future, so stay tuned.

Now, my open letter to Mr. Buffett and President Obama:

Dear Mr. Buffett and Mr. President,

Excuse me Mr. Buffett, but for the longest time, I had the utmost admiration for your savvy investment experience, your wisdom, your folksy way of seeing through problems and cutting to the chase.

But quite frankly, I can no longer say that’s true. Not after your recent statements about taxes.

You see, the problem is not that you’re paying less taxes percentage-wise than your secretary …

The problem is that your secretary is paying more percentage-wise than you!

If you want millionaires and billionaires to pay more in taxes, then lead by example. Each year simply write an extra check to the Treasury for what you feel is appropriate.

Heck, even if you took just 1% of the money you’re giving away with other billionaires like you who have joined the “Giving Pledge” …

And you gave that money instead to the country and way of life that feeds you, you’d still be donating money to a charity (our country) and you’d accomplish your desire to pay more in taxes.

My guess is that you don’t like that suggestion because you wouldn’t have control over the money and you’re not sure if Washington would use it wisely.

Either way, forcing the rich to pay more taxes is NOT the answer.

The answer is that taxes need to be CUT for your secretary and the other 99% of the population that does not make the kind of money you’re used to making.

Heck, if you were to help get taxes cut for your secretary, think about how much more she could save for retirement or to improve her lifestyle here and now.

It seems to me you got this backwards, big time. The rich don’t need to pay more in taxes. The middle and low income segments of our society need to pay less in taxes.

And Mr. President, please stop penalizing the rich, who provide most of the jobs in this country. Instead, I strongly suggest giving everyone else a break.

That’s where your efforts should be directed. NOT toward sowing the seeds for class warfare, but improving the lives of all Americans.

Consider a flat, consumption tax, with simple exemptions for the basic consumable necessities of life, such as food, shelter, water and energy.

Get rid of the archaic, effectively illegal direct taxation of income system that we have now. The founding fathers of our country foresaw the dangers of it.

Instead, rise above the petty class antics and perhaps one day you too might be considered a ‘founding father’ — of a new America.

Respectfully,

Larry Edelson,