As fans of Superman comics and/or Seinfeld know, Bizarro World is a land where up is down, black is white, good is bad and so on. In other words, it's sort of like the world I found myself this week at the Denver Gold Group's San Francisco gold forum.

Whereas equity and fixed-income traders foresee only positive outcomes from the Federal Reserve's aggressive monetary policy, gold advocates see Alan Greenspan behind the wheel of an out-of-control vehicle headed for a steep turn. Where equity optimists spy salutary effects of a weaker dollar, gold bulls envision a crumbling currency leading to higher inflation, buoying the yellow metal.

That's perhaps a bit dramatic, but the salient point is that recent gains by stocks and Treasuries have done little to dissuade gold adherents from the righteousness of their path.

Certainly, the rally in financial assets hasn't dampened the bullishness of John Hathaway, manager of the ( TGLDX) Tocqueville Gold fund, whose speech was the highlight of Wednesday's session. (Full disclosure, I have a long position in this fund, which is up 0.4% year to date after rising 83% in 2002.)

Gold is the "best kept secret" in investing, Hathaway declared, suggesting gold's five-year outperformance vs. the S&P 500 is just the beginning of a long-term secular upswing that could last as long as 20 years, judging by past cycles. The bottom line is that Hathaway thinks gold can go to $1000 per ounce before its current bull move ends.

The most important factor driving gold is that monetary policy is being driven by deflationary fears, Hathaway said. The Fed is expanding the money supply and talking about "unusual methods" for combating deflation, as embodied by Fed governor Ben Bernanke's "printing press" comment last November.

"The more truculent the Fed is regarding deflation , the better prospects are for concern about paper assets," Hathaway said. "In the aftermath of a bubble, there is no quick fix." (In other words, by trying to forestall the business cycle, the Fed is only going to make matters worse for the economy and paper assets.)

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