The price of gold hit a new high yesterday (although a) not on an inflation adjusted basis and b) it pulled back slightly today). The main reasons would appear to be turmoil in Euro-land and all those pictures of riot police in the streets of Greece; gold is seen by investors as a tangible asset that's a hedge against global uncertainty, and it's biggest driver is fear. Luckily -- if you're a hawker of gold coins, anyway -- the level of media-generated fear is at an all-time high these days, even when adjusted for windbag inflation.

In my forthcoming book "The Backlash: Right-Wing Radicals, Hi-Def Hucksters, and Paranoid Politics in the Age of Obama," the connection between conservative talk radio -- especially Glenn Beck -- and the peddling of gold is something I take a close look at (noting, in fairness, that some liberal radio yakkers sell gold also). Beck gets special attention a) because of his close relationship with a leading gold coin seller, Goldline International and b) no one does more in his supposedly untainted editorial commentary to invoke panic about a future currency collapse or societal breakdown than the Fox News and radio host.

While there are market reasons why some institutions and large investors might buy gold, most experts think the pricre of gold is hitting new records because of panicked small investors. Peter Cohen on AOL's Daily Finance has a good look at the phenomenon:

So why do people keep driving up the price of gold? As I've argued before, I believe there's a gold media complex with some serious hooks into the minds of millions of small investors. How so? Glenn “Passion For Gold” Beck thrives on a paranoid fear of the Fed and its printing presses.

His philosophy is also seemingly tied to his work for a gold retailer who sponsors his show. Beck's basic idea is that the Fed is part of a global banking conspiracy that will use its control of the money supply to print huge quantities of useless paper and then throw everyone in concentration camps as Armageddon approaches.

My London source points out that sadly, Beck's passion for gold has infected even his in-laws: “I'm amazed to see how much effect Glenn Beck has on less sophisticated investors by endorsing gold on his show (and apparently getting paid for it). My in-laws in rural Minnesota are holding on to their gold like the bible 'because Glenn says so.' That's unbelievably sad, and correcting it should be one of the objectives of the new financial consumer protection agency.”

When the U.S. recession ends and the Fed starts to raise interest rates, those who buy gold now will likely suffer for their faith in the metal.

Exactly. While gold can be a hedge against inflation -- as part of a diverse portfolio -- many experts and central bankers (and yes, opinions are divided, as always) don't believe that long-term inflation is a risk right now. While it won't be shocking if gold goes even higher in the short run, delighting Beck and some of fans, by all evidence this rise is a bubble...and bubbles burst.

And God only knows what kind of backlash that will promote.