On Gold

Interesting:

For investors convinced U.S. lawmakers and central bankers will successfully manage the budgetary woes and the massive unfunded liabilities of Social Security and Medicare, then gold is overvalued in the long term. Righting America's national balance sheet would explicitly raise the dollar's value as investors with money abroad move assets into a more-sound American economy. The selling of euro, yen and pounds would push the dollar higher—and gold lower.

If, however, you worry the U.S. balance sheet is irreparably damaged, then gold currently reflects the likelihood that a weak-dollar trend still has years to run as the U.S. struggles with its financial mess. Investors—and consumers—looking to preserve their purchasing power will gravitate toward gold, since its quantity isn't easily manipulated.

Invest in gold, then, according your beliefs about the future of the greenback. Just don't invest based on the idea that gold is a proxy for inflation. You are likely to be played for a fool.