That scenario could play out, but the more likely cause is high inflation in a foreign country. I was watching the gold market off and on before the financial crisis, and closely from 2009 to 2011. Unlike some other goldbugs, I took the U.S. inflation figures more-or-less at face value; the food I bought didn't go up in price all that much. That posed a conundrum: why would gold be shooting up (as it was from the start of '09 until it topped in '11) even though inflation was minimal?

The answer was China and India. In China, the new prosperity dovetailed with an old tradition of buying gold to save. Also, the Chinese central bank was buying a lot. And India, another nation with a strong tradition of gold-buying, did suffer high inflation at the time gold was climbing!

Whether or not gold goes up to that magic $5,000, now is a good time to buy it. It was in the doldrums for more than two years and is now waking up. Anyone buying and holding right now is likely to get a profit.