The price of gold took a nose dive earlier this week, its biggest two-day decline in nearly 30 years, posing a significant test for the axiom that gold is the world's only "can't miss" investment.

Throughout human history, gold has shown a remarkable tendency to drive people crazy. As the "currency of last resort," they'll do anything to get it and once they have it, they'll do anything to protect it. Even today, gold is seen by people from all walks of life—who are often mocked with the label "goldbugs"—as the one safe haven for investing in troubled economic times. It's older than any bank or state currency, you can make it into other things, and you can take it almost anywhere in the world and trade it for something.  (That's the marketing pitch, anyway, made by those commercials you see a lot on Fox News, not to mention all those "cash-for-gold" stores on every corner.)

Imagine the worst case scenario—nuclear holocaust, plague, alien invasion, or (horror of horrors) the collapse of the world financial system—and you can imagine a world where it would be handy to have something you can actually trade with other people for valuable stuff. The problem is that if you're the kind of person who buys gold to ward off disaster, you're also probably the kind of person who sees disaster around every corner. Even worse, you actually start to hope for it, because a collapse of the system both vindicates your strategy and makes you a ton of money.

That makes things especially complicated when disaster actually does strike. Monday's giant dip in gold prices happened to coincide with the Boston Marathon terrorist attack. Stocks plunged across the board, as markets had their worst day of 2013. Bad news was everywhere and that's good news for goldbugs, right?

Well, yes and no. Gold has come back ever so slightly from its plunge, but is mostly static since Tuesday morning. The selloff stopped, but nobody started falling over themselves to buy it up. If you look closer, there does seem to be much connection to the price and real world news at all, but that doesn't stop people from saying things about gold that probably shouldn't.

Falling gold prices are good for gold 

The "silver lining" for goldbugs, of course, is that they have an amazing knack for finding ways to make all news, good and bad, fit their thesis. Some times gold plunges, but that's not gold's fault. Blame central bankers like Ben Bernanke who are obviously manipulating the gold market to protect their own interests (and ruin yours.)

One of gold's other virtues is that is also traditionally considered a solid hedge against inflation. The theory is that when governments and central banks work their mischief with printing presses, dollar bills (or euros or pounds or what ever currency you prefer) lose their value. But if you already converted your dollar bills to gold, then you've got nothing to worry about. In fact, inflation will only push gold prices higher, making your decision to buy it even smarter. 

Gold prices falling further is bad for the world, thus good for gold

The flip side, of course, is that falling gold prices equals deflation. You're still losing money in that case, but you can take comfort knowing that central bankers are still screwing up, just in the opposite direction. (And that Paul Krugman is wrong.) Yeah, you're not making money (yet), but falling gold price still proves how fragile the economy is ... which is what makes gold such a good investment!

If gold prices fall even further, that's not real gold 

All is not lost, however, if you're willing to accept the idea that the real losses are in "paper gold." To goldbugs, the true value of gold is that it is a thing you can hold your hand. But anyone can trade gold in today's financial markets, since you don't actually have to own the physical gold to so. You can buy it as part of Exchange Traded Fund," or short sell it without ever taking possession of a single ounce of the stuff.

But when disaster strikes—not Boston level-tragedy, but a true worldwide depression—all you have is a piece of paper saying you own gold...  somewhere. Good luck finding your bars, or convincing someone else to take a certificate in a barter deal.

But if you're an actual, physical gold owner, just sit back and have another drink. You're going to be fine.

Do you know what you'll want a bunch of if the world is ending?

There is one other thing you can do in the face of plunging gold prices. BUY GOLD! Glenn Beck has long been a true believer in gold's power (the fact that gold merchants are some of his major sponsors is just a coincidence, of course) and there was no way he would let the those two stories pass unnoticed. He didn't explicitly say that the Boston attack was a good excuse to stock up on precious metals, but "wouldn't this exactly be like how it would happen?" We're not at the end of the world yet, but if we were, "You better have a plan and know what you and your family are going to do in the time of more difficult days ahead."

If you believe gold is the best investment there is, then use this temporary dip in the market to gobble up as much as you can. You think it's going keep down? Nonsense!Gold is never worth zero! So get in before the rally!

Yes, that makes no sense, since nothing is ever worth zero. But gold mania isn't about making sense. There are plenty of real economic reasons that might explain what happened to the price, but don't worry about those today. It's about beautiful, beautiful gold. 

Say, do you have any gold?