In the minds of goldbugs and a few economists (mostly of the Austrian school) gold has always been viewed as money rather than an ordinary commodity. Interestingly, Alan Greenspan was also an advocate of the gold standard at the beginning of his career.
But today may mark the day when many others have come to believe that gold is not only a safe-haven in times of turmoil but also a viable currency, one that cannot be debased at the whim of a central banker. While the world has been flocking to the $US to escape the ravages of the plummeting Euro, it has also been rushing into gold. Today's action was very telling. The US dollar rose smartly against almost all currencies and yet gold rose in US dollars by 30$ an ounce. And this on a day when most commodities, such as oil, tumbled.
The world is slowly losing faith in all currencies, it seems. Even the US$ is viewed by many in comparison with other currencies as merely the equivalent of the nicest house in a street full of crack houses - a relative and temporary refuge at best.
