Excerpted from the S&A Digest:
Gold has become awfully popular and, as you know, when any asset becomes very popular, that's usually a sign of a top. On the other hand, sometimes market fundamentals overpower market sentiment. I wouldn't be surprised if this is one of those times.
As for me, I'd never trade gold. Not that you can't or shouldn't trade gold. But for me, gold is simply the ultimate store of value. I buy as much as I can afford each year. I put it somewhere very safe. I forget about it. Some years, I might pay too much. Some years, I've definitely gotten a great value. But it hardly matters, because I'm committed to a lifetime pattern of purchasing and I will never sell. My bet is my gold investing alone will make me a wealthy man over the course of my life.
The world's paper currencies are constantly devalued by the politicians who run them – it has always been this way, it will always be this way. It is part of human nature. Never forget this: The central truth of economics is scarcity. There will never be enough of anything to satisfy everyone. But successful politicians must promise everything to everyone. Paper money is the bridge between economics and politics. It's a bridge that cannot stand for long.