"An insurance bet against what?"
Are there any shortfalls in potential disasters? The housing bubble, bird flu, Iran, the deficit, China not to mention 50% of the country that is clueless on basic economics and the other party, the one in power, clueless about spending restraint?
Lots of potential bad stuff out there. What if the tax and spend democrats take over. If you think the republicans in congress are out of control wild spenders, imagine democrats who both spend like holywood trophy wives and disarm us in the face of terror.
But how exactly does gold act as an insurance policy? In other words, how does it pay-off if something really bad happens?