I wrote a letter here in December 2011 saying that I intended to sell down my gold holdings. Some of our long-term readers were shocked. But it made good sense to me.
I'd bought my gold over a decade earlier, when it was trading at under $300 an ounce. As it had risen to over $1,500 it had begun to make up far too high a percentage of my portfolio and that wasn't the no-brainer it was back in 2000. Three hundred dollars was unarguably cheap. Over $1,500 wasn't.
At the same time, the US (and the housing market in particular) looked like it was beginning to show signs of recovery.
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I always have in mind a point that Tim Price made to me when this crisis kicked off. "This all started with the US housing market", he said. "It will only begin to end when that recovers." So there seemed a faint chance in late 2011 that we were nearing the beginning of the end of the crisis, and I changed the way I looked at gold as a result.
Instead of holding it as an investment, I started seeing my holding as pure insurance (lots more on this from John Stepek in our cover story: What killed off the gold rush?).
That doesn't mean last week's crash didn't hurt (if things don't pick up in my Sipp, you are all going to get to look forward to me working at MoneyWeek for many, many more years). But it does mean I won't be selling more. Less than 7% of my portfolio is now in gold, and while I won't be using the crash to buy any more (the price could easily keep falling), I can't see that I want much less insurance than that.
John looked at some of the reasons why it makes sense to hold some gold. But you only need to flick through the week's papers to see that all is not as it should be in the global economy.
We know that Japan is prepared to do whatever it takes to dump deflation and force growth. We know the EU is dedicated to the same aim. We know quantitative easing in America, while easy to slow, will be very difficult to reverse (how can things ever be so good that a central banker would be prepared to risk taking many billions out of an economy?).
And we know that in Britain, government policy is actively to encourage inflation: consumer price inflation is stuck at around 3%, but the groundwork has been laid for incoming Bank of England chief Mark Carney to indulge in what the authorities like to call more "activist" monetary policy.
At the same time, the risk of crisis in China is rising and even the International Monetary Fund, which can be a tad slow off the mark with this kind of thing, has warned that "extraordinarily loose monetary policy risks sparking new and dangerous credit bubbles which threaten to tip the world back into financial crisis", says the FT.
I daresay that a good many people will be scared out of holding any gold by the last week of losses, but as long as the macro-economic environment remains this volatile and this experimental, we won't be.
