Uh oh.

Gold has rebounded 30% since November in part on fear U.S. and other Western governments are spending money they don't have, making promises they cannot afford and offering incoherent "rescue" plans that won't work. A massive currency collapse, like what we've seen in Mexico, Argentina, Russia and other banana republics, could happen to the U.S. Let's hope not, but the renewed surge in the price of gold suggests the market is again losing confidence in the system, and for good reason. Government policy is the big wildcard here. Bad policy and incoherent and inconsistent execution will delay and potentially undermine the recovery.