While the tide is clearly turning against free markets (namely) due to the fumblings of comrades Bernanke, Paulson and Frank, we do not believe this is the end of the world.
For our own accounts we have been long of gold for some time, we will recommend that investors dedicate no more than 10% of their capital, split between the Tocqueville Gold fund (TGLDX) and to the Market Vectors Gold Miners etf (GDX) , and to physical gold. John Hathaway has been piloting TGLDX since 1998 and we have been pleased with his stewardship.
Why do we like gold? The asset is under-owned and unappreciated. Mine supply is not expanding and as has often been written by luminaries such as Marc Faber and Doug Casey, it is the one currency that cannot be printed by any central bank. Gold is not anyone's liability.
History has shown us that all paper (fiat) currencies eventually return to zero. So we are prepared for the worst, but it is not necessary for us to receive a good return on our investment. Hard assets, especially gold deliver outstanding returns when "real rates" are negative. We expect the "real" rates offered by Fed funds, t bills, and money market funds to remain firmly negative for some time to come.
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