Exchange traded gold also carries significant institutional risk. Just when you might be making a killing, the institution could fail. Some gold dealers will hold your precious metals for you, and others have suggested that some such dealers may be engaging in "fractional reserve" gold sales. Physical gold in your own possession can go up or down wrt various currencies as well. The policy of the US Fed seems to be: "Take an assured haircut by holding your dollars or take some risk." Of course one can always take comfort from the fact that the Fed is mandated to regulate the banks and the soundness of the currency.

"It is not necessary to have hope in order to persevere."