http://blogs.wsj.com/wealth/2010/10/04/uh-oh-the-rich-are-buying-gold-again/
It seems that the court of investor opinion has again shifted its verdict to gold as the investment of choice. Not surprisingly, the economy isn’t doing well – again. Last time, the gold rush happened in 2008-2009, when the economy tanked. Stocks fell like never before, Freddy and Fannie got absorbed by big government, AIG got an $85 billion package, and Lehman tanked. So investors sold their stocks and ran for gold, a precious metal eternally increasing in value. History will repeat itself, to the further detriment of the economic recovery.
An economic recovery cannot happen without increased spending by consumers and investment by corporations. The problem is, consumers aren’t willing to spend (because they have no money) and corporations are afraid to hire (because they have no money). There is one group (aside from big government in debt) that has money – investors! But, sadly, their money isn’t being sent to the right places. Instead of pooling funds into companies, who, in turn, use these funds to purchase labor and capital, investors are buying gold, which does nothing but sit in a safe looking pretty. Now that’s bad finance. But who can blame them? Investors too, fear buying stocks and losing their money forever.