Yesterday, gold closed at $1,200. Long-term Daily Reckoning sufferers can finally hold their heads up. We bought gold at the beginning of the bull market. New readers, with no gold buried in their back yards, may wonder: is it too late?

Here is a quick answer: no. We’re still a long way from gold’s ultimate destination. Our ‘Trade of the Decade’ was to buy gold on dips and sell stocks on rallies. The idea of that trade was that gold and stocks were going in opposite directions. Stocks were supposed to go down. Gold was supposed to go up. They would meet at some point, we imagined.

But lately they’ve been going in the same direction. Yesterday, for example, stocks rose with gold; the Dow added 126 points.

Which poses a bit of a dilemma. We think stocks are more likely to go down than up. Will gold go down too? Yes, probably.

Does that mean you shouldn’t buy gold here? No, not necessarily. If you’re trading, we’d suggest you wait. Gold is ready for a correction.

But it is usually a mistake to trade in an out during a major bull market. If the trade goes against you, you end up sitting by the sidelines as the market roars forward. You miss the best part.

Gold’s best part is still ahead. And this is not just a bull market; this is a fortune maker. Gold still hasn’t entered the bubble phase. It is just a very strong bull market. Eventually, it will soar…adding $100 in a single day. It will take our breath away. You want to be in it when that happens.

But is $1,200 the best price you can get to enter the gold market? Probably not. But it’s not a bad price. You can wait for a better one; but don’t wait too long.

John Hussman puts the odds of a major market crash sometime in the next 12 months at 80%. If stocks go, gold is likely to go down too. And it could stay down for a long time.

We keep our Crash Alert flag flying…and have a hunch the crash will come sooner rather than later. Day after day, the bubble gets bigger…and the pins get closer. Greece? Britain? The US?

Real estate? GDP? Bond sales? Christmas sales? So many pins…so little time.

One of the biggest pins is the record borrowing by governments. The longer it goes on…the bigger, sharper and closer the pin becomes.

Dubai was nothing…like getting stuck by a mosquito. It itches. It swells. But it does no lasting damage. It could be much worse. Now, the government of Dubai says that Dubai World is on its own. Good luck to the lenders.

Those Arabs are pretty smart. If the US feds had only done that with AIG, GM, Fannie Mae and other big debtors…the whole thing might have blown up and blown over …and now we’d be picking up the pieces and getting back to work.

Instead, the pols and central bankers trod in where angels and sensible investors feared to go at all. Now, they’re wondering how to tread out.

Germany announced that its deficit would not be as big as expected. Instead of 49 billion euros, it will be only 39 billion – below 3% of GDP this year. France says it’s bringing its deficits down too – to less than 3% of GDP by 2013.

The US and the UK, on the other hand, are out of control – with deficits over 12% of GDP and no credible plans for substantial reductions. As we reported last week, these deficits are largely structural – that is, they are the product of many years of mismanagement, not just this year’s crisis-respond claptrap. It’s hard to bring them down because they include public health, unemployment, social security and defense measures that are very difficult to stop.

Yes, stocks will react, eventually. Gold will come down with them. Then, at some point in the future, gold and stocks will de-couple…and gold will head to the moon.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.