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In an extreme credit crunch, leveraged purchases of gold cause forced sales, because any price correction triggers margin calls. As a result, gold can be very volatile - upward and downward - at the peak of a crisis.

At present, financial crises occur, chiefly because the paper currency is redeemable in gold only.

The actions taken by central banks and other authorities to stabilize a panic in the short run can work against stability in the long run if investors and firms infer from those actions that they will never bear the full consequences of excessive risk-taking.

Worry is the interest paid by those who borrow trouble.

A short squeeze could happen with the U.S. dollar if lenders suddenly forced debtors to pay in cash.

Gold has intrinsic value. The problem with the dollar is it has no intrinsic value. And if the Federal Reserve is going to spend trillions of them to buy up all these bad mortgages and all other kinds of bad debt, the dollar is going to lose all of its value. Gold will store its value, and you'll always be able to buy more food with your gold.

Worry is interest paid on trouble before it comes due.

What would a loss of confidence in the dollar actually look like? Gold going absolutely nuts.

If we did go into a recession, something that's always possible for the U.S. or Europe, we could lower interest rates and expand the money supply without worrying about the price of gold.

I can hold a note as long as the Chase National Bank.