I described in an earlier post how Marc Faber argues for precious metals in an era of shaky currencies.
For investors (not speculators) it is very hard to own gold, because you cannot attach a logical value to it. Unlike stocks or bonds, gold has no cash flow and has a negative cost of carry – it costs you money to hold it. It is only worth what people perceive it to be worth right now.
Since Vitaliy wrote that, in 2009, gold has more than doubled in price. That doesn’t mean he was wrong: maybe there has just been a bubble in gold. But what would it look like if the bubble popped?