From HardAssetInvestor:

Don Luskin (Luskin): I think a year from now, gold is going to have a very bimodal result pattern. As we're talking [April 17, 2009], gold in the futures market is at $883 per ounce. A year from now, it will either be double that or half that; nothing in between.

I regard gold as substitute money. So when you ask, "What's gold worth?" to me, what you're really asking is "What is the expected value of money?"

If the financial crisis deepens and the world's demand to hold safe-haven balances increases sharply again back to the levels of panic that we saw last October, November, December, then the world will be plunged into a monetary deflation; deflation defined as extreme appetite for money as opposed to any asset or any thing - a desire for the complete safety of money.

So when the demand for money completely outstrips the supply of money, you get deflation. In that kind of world, even gold isn't a safe haven; the only thing that would do is liquid money.

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