For years, Spaniards have trusted home ownership as a safe and profitable savings channel. Up until the late 1990s, "investing in bricks," as the Spanish call it, was a relatively easy and affordable wealth accumulation strategy (according to the government, 83% of Spaniards are homeowners). The coupling of Spaniards' blind faith in ever-rising real estate values with the artificially low interest rates that came with the euro - as well as a financial system plagued by politicians recklessly managing savings banks - conjured up a massive housing bubble.

Since Spain's entry into the euro system, the country has experienced such economic myopia that in the spring of 2007, Pedro Solbes, the then Socialist government's Minister of Finance, revealed the sale of a large portion of the country's gold. At the time, Minister Solbes argued that the precious metal "was no longer profitable," and that the proceeds from the sale would be "reinvested in sounder assets," such as Spanish sovereign debt. That year, Spain sold 157.8 tons of gold (32% of the national reserves) at an average $630 an ounce. We lost over $5bn of appreciation in the intervening years.

David Fuller's view Most European governments sold large chunks of their gold bullion reserves but compared to the UK's Gordon Brown, Spain's Pedro Solbes looks like a genius for waiting until spring of 2007 before selling.

The euro's shaky status, not to mention burst housing bubbles, is certainly a factor behind European investors' interest in gold. This rediscovery of gold's monetary value is, I maintain, a story that will run and run in all countries because no fiat currency has ever held its purchasing power for very long, nor will they in future because all governments and their central banks are closet inflationists. Think of it this way: The price of gold remains constant over time; it is fiat money that loses value.

Gold has experienced its own bubbles, as we last saw in the late 1970s, but Fullermoney maintains that the next one is not in sight, given all QE and record low interest rates.

When gold next forms a bubble, what will eventually cause it to burst?

It will almost certainly be sharply higher interest rates, as we last saw in the early 1980s. That may not occur until the global economy is next synchronised in a period of strong GDP growth, accompanied by inflationary wage increases. Meanwhile, there is no call for the next Paul Volcker to lead the US Federal Reserve.