I just finished reading "The Greatest Trade Ever" by Gregory Zuckerman about John Paulson's hedge fund shorting of the housing bubble. Gold is mentioned once in the epilogue:

===========================================

"As Paulson sat in Andrew Hoine's nearby office one day, discussing how much was being spent by the United States and other nations to rescue areas of the economy crippled by the financial collapse, Paulson dicovered his next target, one he was certain was as doomed to collapse as subprime mortgages once had been: the U.S. dollar.

Paulson made a simple calculation: The supply of dollars had expanded by 120 percent over several months. That surely would lead to a drop in its value, and an eventual surge in inflation.

'With all this spending, we're going to have massive inflation,' Paulson told Hoine, arguning that almost every major currency was at risk, other than the Chinese yuan. 'What's the only asset that will hold value? It's got to be gold.'

Paulson never had even dabbled in gold, and had no currency experts on his team. Some of his investors were skeptical of his argument, noting a burst of inflation was unlikely with unmployment high, wages stagnant, and businesses running at a fraction of their potential capacity. Others said too many other investors already had flocked to gold. Some of Paulson's investors withdrew money from the fund, pushing his assets down to $28 billion or so.

Paulson acknowledged that his was a straightforward argument, but he paid the critics little heed and proceeded to buy more than $1 billion of shares of gold miners, or 12 percent of his largest fund. He also purchased billions of dollars of gold investments to back new classes for his own money.

Betting against the dollar would be his new trade.

'I couldn't be more confident,' Paulson said in the summer of 2009. 'Three or four years from now people will ask why they didn't buy gold earlier. Over time our currency will lose value and inflation will rise - that's our future.'

His passion for yet another big trade was hard to mask.

'It's like Wimbledon,' he says. 'When you win one year, you don't quit; you want to win again.'"