Gold skeptic acknowledges that goldbugs may be right this time

Said skeptic is Eric Reguly, who believes that gold is shifting from a mere commodity to a kind of money. His piece is entitled "This time, the gold bugs might be right." He goes from

Every few decades, maybe less often, gold seems to detach its shiny self from the greater economy and go berserk. Prices went vertical in the early 1860s (American Civil War) and again in the early 1930s (Depression). They're taking off again, this time in the absence of war or depression or a genuine crisis, like the end of Oprah's show.

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Governments may try to inflate the debt away. If it doesn't work, they will have only two choices - service the debt or default. The chances of a default are very slim, of course. But note that the volume of credit default swaps linked to the United States, Japan and Britain, which measure the cost of insuring against bond defaults in those countries, has doubled in the past year.

Defaults, real or potential, are not kind to currencies. The rise in gold prices may be just getting started.

As the gold bubble continues to form, more and more skeptics are going to be joining the party. They'll be holding their noses like Mr. Reguly, but they'll be joining.