Cash In A Mattress? No, Gold In The Closet.

A hundred-ounce gold bar, when you hold it in your hand, is surprisingly small and even more surprisingly heavy. It's somewhat longer and fatter than a Hershey bar, but it weighs six-plus pounds—as much as your old calculus textbook. Its color is unforgettable. Pure gold is gold. It's not like your wedding ring or your grandmother's bracelet. It's a deep, dense yellow, the way the ocean is deep blue, and it sparkles. You can understand at last why the Bible says the streets of heaven are paved with it.

On the day I held the gold bar in my hand, it was worth nearly $100,000. My companion—an established, accomplished, affluent businessman of retirement age—had bought it as a hedge against the sinking Dow and his fear that Obama's stimulus package will inevitably trigger wild inflation. We had picked it up in the basement of an HSBC bank branch in midtown Manhattan. When I handed it back to him, he put it in his briefcase. We went upstairs, past guards, through metal doors. Out on the street, we said goodbye and I watched him go, a tall, thin man carrying a $100,000 briefcase. He doesn't want me to tell you his name—or, really, anything about him—because he's keeping the gold in a safe in his basement. His friends, he says, are doing the same thing. "There is an increase in the number of wise, reasonable, well-read, well-intentioned people who are buying some gold and putting it aside," says Dennis Gartman, editor of The Gartman Letter, a daily analysis of financial news.

John Wynocker, a hydraulics inspector, lives in Cincinnati and has been buying gold and silver coins and bars for 15 years, but since the passage of Obama's stimulus bill, he has been motivated to buy more. He is hiding the precious metal in places where not even he can find it, he jokes. Are you burying it? I ask. "Perhaps," he says. "Our country is so far in debt, it's staggering. I'd like to retire someday. What else am I going to do to protect myself?"

Is this madness? Here is a respectable and buttoned-down suburbanite, behaving like an end-of-the world paranoiac. Here is Wynocker, a working man, trying to get a grip on his own financial future with a shovel. The price of gold is near an alltime high—it topped $1,000 an ounce on March 13—yet the number of Americans who are taking delivery of gold coins and bars is rising. According to the World Gold Council, Americans bought 600 tons of gold bars and coins in 2008, a 42 percent increase over 2007. That's not as much as in Europe, where gold mania has become epidemic—but significant given the metal's high price. An uptick in the U.S. economy, and buyers are likely to find they've been part of a giant, golden bubble.

But analysts say that if stock markets continue to spin out of control and real-estate values continue to sink, more people will want to take shelter in an investment with a reputation for being safe, reliable and not dependent on governments for its value. "Back in November, when the credit crisis really started getting out of hand, people started to pull the trigger on gold," says Scott Thomas, president of American Precious Metals Exchange. "It's primarily moms and pops, people who have seen their 401(k)s deteriorate over time." Bullish investment advisers, meanwhile, are hyping gold, some promising that it will reach as high as $2,300 an ounce. "We say, 'Panic now. Avoid the rush'," jokes Addison Wiggin, who publishes the online financial newsletter The Daily Reckoning.

There are, traditionally, two kinds of gold investors: speculators and hoarders. The first group trades on the futures market, which establishes the price of gold. The money they make—or lose—usually has nothing to do with taking possession of gold: like most modern-day investments, their gold acquisitions are blips on a computer screen. Hoarders are different. They buy gold, the real stuff, and save it for a rainy day. Hoarders have always existed, but their numbers increase during financial crises. To generate liquidity during the Depression, President Franklin Roosevelt outlawed hoarding in 1933. He demanded that everyone who owned gold coins (except collectibles) or bars turn them in and receive $20-plus an ounce in exchange. That law was rescinded in 1975, and since then retailers that sell actual, physical gold to individuals have jumped in.

Their business models vary, but all gold retailers charge a premium over the spot price and all will deliver it where you want it—usually through the U.S. mail. The mail? I asked Michael Maroney, who is vice president of sales for the Newport Beach, Calif.–based retailer Monex, as I imagined my own postal carrier slipping a gold bar in my apartment's group boxes. The post office offers low insurance rates on precious metals, Maroney explains. "We can never tell you when you're going to get it, but it doesn't disappear."

The last time gold sales spiked so dramatically was the year before Y2K, when Armageddon-minded Americans stashed gold—along with guns and cans of beans—in their basements and backyards. Keeping a lot of gold in your house makes you a target, it's costly to insure and, once stolen, gold, which is easy to melt and recast as something else, becomes nearly impossible to retrieve. That's why Nick Bruyer, the president of First Federal Coin, says he always recommends "a safe-deposit box in a good bank." Nevertheless, the mentality of gold hoarders is that they want it close by; in an emergency, they don't trust the banks. Sales at Cannon Safe were up 43 percent in 2008, and CEO Aaron Baker estimates that 30 percent of new safe buyers are holding precious metals. The company is developing a new ad campaign—"The bank that never closes. You're Cannon safe"—and hopes it will appear on billboards near Wall Street soon.