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I outlined my argument, that the dollar is still too high, that the US external deficit is not sustainable, that the European and Japanese economies are suffering from low growth, that the euro and the yen are attractive only compared to the dollar. I added that gold was making new highs, and that the preference for gold showed the lack of confidence in the main currencies.

I agree with all of those points. However, it is important to understand that Gold is only going to rise so long as the paper currencies are viewed as weak. I think Gold is still a good investment now, as the US has been printing money like crazy, and inflation will hit sooner or later.

My main concern that I wish to express, however, is that every time there is a rise in the price of gold, the gold bugs always herald it as a new era and that gold is going to be 800 bucks an once again. It's not. The chances of teh Dollar, yen, or Euro regaining confidence is high. So even I think that Gold is still a good investment, but don't let yourself be convinced that you should stake your life's savings on a long term resrugence of gold.

So even I think that Gold is still a good investment, but don't let yourself be convinced that you should stake your life's savings on a long term resrugence of gold.

I agree. I see gold as on a hot trend right now similiar to the way tech and telecom stocks were in the early 90's. The potential for a nice profit is there, but if you get too greedy or emotionally involved with it, you could wind up like those suckers who got stuck with $800 gold and $50 silver 20 years ago. A certain objectivity and detachment is required when speculating in something as historically volatile as precious metals.

You are correct. Even Reese-Mogg is not making such claims. He is talking about a 12% run-up in price, not a doubling. So, while it is very likely there will be a war and people will get very nervous, there will also be a peace after the war, and some good things will come of it.

Buying gold is just betting on the number of people who can't see past immediate circumstances. Not a bad bet, but not a long-term investment, either.