what is left for those who previously bought US Treasuries because of their secure appeal? They pay 0 now and will for "some time". Gold will be very attractive to many of these investors going forward.

I read today in a newsletter I subscribe to that THe US government is the only one in current monetary history that has NEVER defaulted on it's debt. Even with a zero return, US treasuries still have lots of appeal. They provide the most certainty in an uncertain world. I wouldn't discount them as a safe haven for some time to come.

Does this mean that gold will not go up? definitely not. it likely will because everyone seems to think it will. Speculators will drive it up in short order and it may even touch $1,000 an ounce but in the short term, IMO, it is not sustainable (Of course on occasion I have been wrong :) ). Even as I write this gold has dropped a bit from it's high today. Maybe things are quiet in Asia.

In the long run, though, gold will go up for all the reasons stated. But again, IMO, those that have the ability to move gold up permanently (governments) can't afford to because they are sitting on at least as much or more US dollars than they have in gold. There is too much fiat money out there (EVERYWHERE) that noone wants to make the first move ... At some point there may be a global decision to either devalue currencies in which case your buying power does not change even though gold goes up, or gold is repriced to back the fiat currency out there... or somewhere in between. Noone really knows at this point.

On the other hand, there is some certainty that Gold Stocks (ie large producers) were way undervalued. At their lowest this year they were cheaper than they were when gold was $350 an ounce ... that to me is a tightly wound spring. I've quietly doubled my money in the past month on HGU:tsx, a global gold stock ETF that pays 200% of the return on the basket of stocks ... and it keeps on ticking because gold stocks are still under valued.