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In fact, I am against it too, because it will just mean more manipulation of gold by central banksters.

 

What I want is (tax-) free competition of currencies, including gold and silver. Then we'll soon see how the paper turds are doing.

 

Agreed. I want the market to come up with its own solution, and I'm sure that if you eliminated central banks then we would go back very quickly to commodity-backed money, very probably almost exclusively gold/silver (at least initially) but the important thing would be that it was set by the market and not dictated by TPTB.

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If you want to exit Gold at the right time, you should keep a watchful eye on the alternatives.

Agreed. And BTW, the gold as an investment discussion is somewhat different from the gold as a currency discussion.

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In fact, I am against it too, because it will just mean more manipulation of gold by central banksters.

 

What I want is (tax-) free competition of currencies, including gold and silver. Then we'll soon see how the paper turds are doing.

 

 

I would like Gold/Silver and paper money to work side by side. It would be good if people we able to save in Gold and Silver and then buy a big ticket item with there Gold/silver. I.E. Someone saveing and then buying a house with there Gold/Silver.

 

A Gold coin or some Gold backed paper would not be a lot of use in the local paper shop for your morning paper. so in that case you would use paper money. But it would work well if you wonted to buy some land.

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I would like Gold/Silver and paper money to work side by side. It would be good if people we able to save in Gold and Silver and then buy a big ticket item with there Gold/silver. I.E. Someone saveing and then buying a house with there Gold/Silver.

 

A Gold coin or some Gold backed paper would not be a lot of use in the local paper shop for your morning paper. so in that case you would use paper money. But it would work well if you wonted to buy some land.

 

It's one or the other; In a commodity-backed system, the paper money simply becomes a receipt for the commodity and is redeemable against it. That is not the case in the fiat system presently.

 

The issue of fractional reserve banking and fiduciary media is a different issue. You can have fractional reserve activity within a commodity backed system, but the commercial banks would have to be more cautious with their reserves as there is no lender of last resort. It would be very difficult to uninvent the fractional reserve system.

 

I would personally be in favour of a commodity-backed system but to allow normal fractional reserve activity within this. If no fractional reserve system is in place then the banks would charge you to store your deposit.

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Errrh. He was right in 1980. He has been right in 2011 (except for being a few months off the time line). And I truly believe he will be right in that we will see a much higher gold price.

It's futile saying Sinclair is absolutely right or absolutely wrong. The thinkers are going to ask how right he is. Or in other words, has he got the rate of appreciation right? He was willing to bet a fortune on 1650 because being a hyper-inflationist, he thought the price would have blasted well through that point by that time. The fact is it crept through that price and has been hovering around that price for quite some time now.

 

If we're generous and give him the 'letter' [that gold got to 1650 at/ around that date], we can also be critical in 'spirit' and say that gold is moving quite in contrast to Sinclair's predictions. He was right to see gold going up, but wrong perhaps in his prediction of the rate and his explanation.

 

Some have been predicting instead that gold will move up steadily at 20 odd % a year, explicable due to the appreciation of an informal currency in a free market of currencies. This prediction has worked out more accurate than Sinclair's, which encouraged rockets [i notice no rockets are posted these days]. Sinclair's predictions are based on the dubious idea, since we are in a debt deflation, that gold is an investment/ commodity/ inflation hedge - a sponge to soak up that deluge of money that's supposed to be coming upon us.

 

 

249px-SpongeBob_SquarePants_svg.png

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Sinclair's predictions are based on the dubious idea, since we are in a debt deflation, that gold is an investment/ commodity/ inflation hedge - a sponge to soak up that deluge of money that's supposed to be coming upon us.

 

And how do you know different?

 

The money is getting deposited in the CB's accounts. It will not be extinguished. At some point it will be lent. The question is will the economic output of the world be equal to it. Wait and see, but if there is no major advance in technology or energy production then we will see inflation of horrendous proportions and gold will take on the mantel of the only honest money.

 

In the last few days I have listened to people call into London radio stations giving opinions that I thought were outside the mainstream. 'Fractional reserve banking','money out of thin air', 'crony bankster capitalism', 'fiat money'. These phrases I have not heard in my day to day life outside these forums, but I hear them now. I don't think it will take too long for everyone to realise what QE really means. Everyone runs away from getting robbed.

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And how do you know different?

Because I don't think I 'know'. It has to do with the nature of knowledge, which most seem to be happily ignorant of these days. Nobody 'knows', all we have is theory/ hypothesis. This a point I often come back to, and where I have an argument with the 'dogmatists'. A hypothesis ['as if'] should be taken as only provisionally true, and never as 100% guaranteed. The strength of one's hypothesis should then be evaluated on the basis of predictive and explanatory power. Sinclair doesn't really offer a theory but a simplistic dogma or faith which is easy enough for people to buy into [based on another form of money illusion - monetarist illusion - where money is mathematically equated/ divided with the number of units]. The problem is its lack of sophistication as a falsifiable theory... not to mention its weakness in predictive power.

 

The money is getting deposited in the CB's accounts. It will not be extinguished. At some point it will be lent. The question is will the economic output of the world be equal to it. Wait and see, but if there is no major advance in technology or energy production then we will see inflation of horrendous proportions and gold will take on the mantel of the only honest money.

 

In the last few days I have listened to people call into London radio stations giving opinions that I thought were outside the mainstream. 'Fractional reserve banking','money out of thin air', 'crony bankster capitalism', 'fiat money'. These phrases I have not heard in my day to day life outside these forums, but I hear them now. I don't think it will take too long for everyone to realise what QE really means. Everyone runs away from getting robbed.

 

Sure, but there are alternatives to simply shouting hyper-inflation. What's needed is a more nuanced view which can take into account all the phenomena in the current economy. Something like combining the insights of those who see depreciaitng currencies with those who see an on-going debt deflation. Synthesis added to analysis. As said before, I don't think Sinclair should either be revered or ridiculed. In so far as you value your independence as a critical thinker, you should take him with a heavy dose of salt.

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Because I don't think I 'know'. It has to do with the nature of knowledge, which most seem to be happily ignorant of these days. Nobody 'knows', all we have is theory/ hypothesis. This a point I often come back to, and where I have an argument with the 'dogmatists'. A hypothesis ['as if'] should be taken as only provisionally true, and never as 100% guaranteed. The strength of one's hypothesis should then be evaluated on the basis of predictive and explanatory power. Sinclair doesn't really offer a theory but a simplistic dogma or faith which is easy enough for people to buy into [based on another form of money illusion - monetarist illusion - where money is mathematically equated/ divided with the number of units]. The problem is its lack of sophistication as a falsifiable theory... not to mention its weakness in predictive power.

 

 

 

Sure, but there are alternatives to simply shouting hyper-inflation. What's needed is a more nuanced view which can take into account all the phenomena in the current economy. Something like combining the insights of those who see depreciaitng currencies with those who see an on-going debt deflation. Synthesis added to analysis. As said before, I don't think Sinclair should either be revered or ridiculed. In so far as you value your independence as a critical thinker, you should take him with a heavy dose of salt.

 

I wasn't defending Sinclair. As I have said elsewhere I do not frequent his site and only read what others have posted about him, and I don't like his crass delivery.

I agree that no one can know the future and so that applies to you also, hence my 'how do you know' comment.

However it seems to me he has been right in 1980 and right in the last ten years, and so maybe that is enough to warrant respect for his theory that the amount of monetary units divided by gold hypothesis will prevail again.

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Latest from Detlev Schlichter -

 

This is why gold remains so attractive. If they stop printing money, the gold price will correct. But then banks and governments will be in serious trouble. So you still cannot put your money there. My guess is that they won’t stop printing money, and what the ECB did this week – although it was already anticipated – further confirmed this. Gold got a considerable beating yesterday, supposedly because Bernanke did not hint at additional easing measures. Well, we will see. Given the aggressive measures we have seen since October from the Fed (swap lines), Bank of England (2 rounds of QE), the ECB (2 rounds of LTRO), and the Bank of Japan ($129 billion in QE), we may see another manufactured rise in financial asset prices and in certain economic indicators over coming months. Maybe we can all enjoy a spring ‘recovery’. The hangover can wait — we just opened another bottle of the really strong stuff.

 

Let’s see how long it lasts.

 

In the meantime, the debasement of paper money continues.

 

http://papermoneycollapse.com/2012/03/ecb-money-injection-not-a-reason-for-optimism/

 

 

Goldkey_logo_removed-300x238.jpg

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Latest from Detlev Schlichter -

 

I guess LTRO is to our time what LSD was in the 1960s. As they used to say back then, “I don’t have a problem with drugs, I have a problem with reality.”

:lol:

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It's always good to get the facts right.

 

http://en.wikipedia.org/wiki/Carlsberg_Group

 

 

 

oh I know which country makes Carlsberg ! :blink:

 

Carlsberg have run adverts some years ago in the Uk with the implied reasoning that they make or would make the best of everything if they made it!!!!!

 

 

 

The word If was used ! :D

 

Perhaps your German sense of humour didn't get the gist of the compliment! :unsure:

 

Regards

 

ML

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Gold Coins Sales Fall 83% at U.S. Mint - 1 March 2012

http://goldnews.bullionvault.com/gold_coins_030120123

SALES of American Eagle Bullion Gold Coins fell sharply in February, while Silver Bullion coin sales also dropped, the Mint's own data show.

 

A total of 21,000 ounces of American Eagle bullion Gold Coins were sold last month. This represents the lowest monthly sales since June 2008, and an 83% drop from January.

===

 

Interesting.

I was hearing the exact OPPOSITE recently on one of those 100% Gold Bull sites.

 

I think we can begin to see some advantages for seeking a balance, as some of us do on GEI

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Hi RH,

 

 

I Posted you a question on 02 March 2012 - 09:49 AM on the gold thread giving two senarios of how I see things playing out for gold and FIAT cash?

 

Could you reply on the gold thread as to how you see it playing out for either scenario or which you see as most likely ?

 

Or if you think they are both boll&&ks please say so !!!! :D

 

Regards

 

ML

 

Post #28783

 

ps your mail inbox is full

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Gold and the basket case

 

 

http://video.ft.com/v/1484287534001/Gold-and-the-basket-case-#

 

 

Emerging countries have been increasing their reserves of gold, but can it again be a stabiliser for the global financial system? Gerard Lyons, chief economist of Standard Chartered, thinks that as the dollar's reserve currency status weakens, the anchor cannot be gold but rather a basket of alternative currencies to the dollar. (5m 18sec)

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Gold could fall below $1500 according to Marc Faber

 

 

 

 

""Marc Faber: The big rally into Sept. 6, 2011, took the Gold Price to $1,922/ounce (oz) and then it dropped until the end of the year, touching $1,522/oz on Dec. 29. It has rallied, and is now above $1,700 again, but I don't think the correction is entirely over. Corrections of 40% are nothing unusual in a bull market.

 

As an adviser, my duty is to always inform people of investment risk. I'm not saying I expect gold to collapse, but telling people the Gold Price will go up leads them to leverage up and speculate. If the Gold Price drops $50/oz, they're wiped out. All I'm saying is that, in my opinion, the Gold Price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money.

 

TGR: Over what timeframe are you looking at the correction?

 

Marc Faber: This year the Gold Price may not exceed the $1,922/oz high that we reached on Sept. 6. Maybe it will. I'm not a prophet. I'm just telling people that I'm Buying Gold and holding it. I don't speculate in gold. If you Buy Gold, you better understand that the price could always move to the downside. If you don't understand that, don't invest in gold—or in anything.""

 

Regards

 

ML

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Hi RH,

 

FWIW,

 

This is my slant on how things will pan out and why Gold is the thing to hold for the time being!!

 

 

Maybe just maybe when the Sh&t finally hits the fan a real asset revaluation will take place, as it is the first time to my knowledge the whole world has been on a Fiat currency credit binge so it is a bit of an unknown !

 

1. Solution one, high real inflation huge injections of cash/printed cash into banks all assets retain value/increase in fiat value the further from the bottom of Exeters inverted pyramid, the less inflation of value, of each of the asset class ! Private Debt is erradicated from the system, which is what is happenning now, debts ratios reduded, ministers make noises they want further lendng publicly to the people but then at the same time enforce stricter lending ratios on the banks, resulting in mortgage debt reduction as we are seeing now without a headline crash in values, hoping at the same time growth will appear from somewhere!

 

(Cash held cash could do well in this senario as people with high personal debt ratios are squeezed by rising interest rates and real falling incomes stagfltion occurs)

 

2. “Paper money eventually returns to its intrinsic value – ZERO” Voltaire 1729 ;):o

 

The worlds nightmare happens the sheeple see Fiats true value!!!!!!!! A huge deflation of all assets takes place again using Exeters inverted pryamid the items furthest away from the bottom of the Pyramid deflate the most against gold! :blink:

 

(With the excepition of fiat cash whch will burn as in Weirmar Germany in this senario!)

 

Regards

 

ML

I think there may be some incoherency here. But I see you mention Exter's pyramid a couple of times. If you focus on the pyramid and understand what it means for fiat/ conventional currencies, and on a global stage, then you might find some coherency.

 

First, Exter's pyramid needs to be 'internationalized' and applied to the global economy. 'Fiat' currencies themselves need to occupy a tier somewhere on that pyramid. I've found it useful to divide currencies into peripheral, commodity, and central/ reserve currnecies. As forms of liquidity they will come lower down on the pyramid closer to gold and further from assets in the higher tiers. So you could have gold at the bottom, with the US dollar [and perhaps Yen] above that, then perhaps commodity currencies above that. Peripheral currencies would be further up near the tier of assets. Remember that due to deflationary pressure monetary value is filtering down from the upper tiers through the middle tiers to the tiers at the bottom. Though the market may move opposite to this at times [the risk on trade] the fundamental movement is down.

 

The crucial point to grasp now is the relativity of value. Assets will depreciate in terms of currency... even as currencies depreciate in terms of more central currencies, or gold. In this relative scheme, a currency could both appreciate and depreciate. It depends on what you are relating it to; if to assets then currency appreciates, if to gold then currency depreciates. Everything depreciates/ deflates relative to gold. What does not happen in this scenario, is the complete erosion of the value of 'fiat'. It does not hyper-inflate, but instead actually strengthens against assets. As for 'money printing', it may soften the effects of a debt deflation, but can not over-come and reverse the process.

 

Hope that helps.

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Gold could fall below $1500 according to Marc Faber

 

 

 

 

""Marc Faber: The big rally into Sept. 6, 2011, took the Gold Price to $1,922/ounce (oz) and then it dropped until the end of the year, touching $1,522/oz on Dec. 29. It has rallied, and is now above $1,700 again, but I don't think the correction is entirely over. Corrections of 40% are nothing unusual in a bull market.

 

As an adviser, my duty is to always inform people of investment risk. I'm not saying I expect gold to collapse, but telling people the Gold Price will go up leads them to leverage up and speculate. If the Gold Price drops $50/oz, they're wiped out. All I'm saying is that, in my opinion, the Gold Price correction is not yet entirely completed. I see significant support around the $1,500/oz level, but it could drop lower. It depends on global liquidity and on money printing by central banks. We could have a big correction if global liquidity tightens or they stop printing money.TGR: Over what timeframe are you looking at the correction?

 

Marc Faber: This year the Gold Price may not exceed the $1,922/oz high that we reached on Sept. 6. Maybe it will. I'm not a prophet. I'm just telling people that I'm Buying Gold and holding it. I don't speculate in gold. If you Buy Gold, you better understand that the price could always move to the downside. If you don't understand that, don't invest in gold—or in anything.""

 

Regards

 

ML

Hyper-inflationists such as Faber are going to climb a wall of worry in the gold market. Along with Sinclair he sees gold sponging up liquidity, but he is not so sure as to whether there will be all this excess liquidity sloshing about for gold to be the beneficiary.

 

Much better to view gold itself as a form of liquidity... as an appreciating currency. And then look at the rate of appreciation. A solid 22 odd % year on year. Looking at the log chart, a slide to below 1500 looks unlikely. Looking more likely is a spike above 2000 sometime this year.

 

So why can't Faber see the obvious trend? Because theory determines what you see. And his theory does not perceive gold as a steadily strengthening currency.

 

 

straedy-1.png

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Hyper-inflationists such as Faber are going to climb a wall of worry in the gold market. Along with Sinclair he sees gold sponging up liquidity, but he is not so sure as to whether there will be all this excess liquidity sloshing about for gold to be the beneficiary.

 

Much better to view gold itself as a form of liquidity... as an appreciating currency. And then look at the rate of appreciation. A solid 22 odd % year on year. Looking at the log chart, a slide to below 1500 looks unlikely. Looking more likely is a spike above 2000 sometime this year.

 

So why can't Faber see the obvious trend? Because theory determines what you see. And his theory does not perceive gold as a steadily strengthening currency.

 

Faber mainly owns gold as protection against total financial system failure. He's spoken just recently about the computers crashing and us having a reset of global finance. He does indeed view gold as a currency which is why he talks about owning gold as becoming one's own central bank.

 

But, I agree with your point about gold's steady appreciation vs other currencies.

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With the recent selloff, the Dow:Gold RSI is spiking again.

From my blog:

 

Gold's recent correction may be setting us up for another great entry point based on the Dow:Gold ratio's RSI reading:

 

Back in December gold was a screaming "BUY" based on this indicator.

 

I am back on the "Long Gold/Short Stocks trade", and will be increasing my gold holdings the more extreme this indicator becomes.

 

As you can see, the indicator has provided excellent entry points over the last 3 years.

 

dowgold_06_3_2012.gif

 

 

 

 

With today's selloff, this reading should be well in to the +60s.

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"TOWARDS A MORE NUANCED VIEW", rather than same old bullcrap

===

...What's needed is a more nuanced view which can take into account all the phenomena in the current economy.

 

Something like combining the insights of those who see depreciaitng currencies with those who see an on-going debt deflation. Synthesis added to analysis. As said before, I don't think Sinclair should either be revered or ridiculed. In so far as you value your independence as a critical thinker, you should take him with a heavy dose of salt.

Agreed.

Do you think we are going to get it from one of these guys?

 

A.

John Ing: $3,000 Gold in 2012 Not As Far-Fetched As You Would Think

Gold miners missing the opportunity to create shareholder value

MP3 : http://www.netcastdaily.com/broadcast/fsn2012-0306-1.mp3

Maison Placements Canada Inc. CEO John Ing joins Jim this week to discuss gold. John believes that gold could reach $3,000 oz. this year, particularly if events in Europe or the Middle East erupt into crisis. John also discusses the potential of precious metals producers paying dividends in gold and silver.

 

B.

Technician David Nicoski: Markets Headed Higher, Along With Gold Stocks and Commodities

Also, Cathlyn Harris on “Who Gets It When You’re Gone,” Ryan Puplava with a Market Wrap-up, and Rob Bernard with the

MP3 : http://www.netcastdaily.com/broadcast/fsn2012-0303-1.mp3

Jim welcomes David Nicoski CMT, Director of Research at Vermilion Technical Research, LLC. David sees the markets as overextended, but notes that markets can stay overextended for long periods of time. He sees the general indices heading higher, along with commodities and gold stocks. Also this week, Cathlyn Harris from the PFS Group discusses an important estate planning topic, "Who Gets It When You’re Gone." In addition, Ryan Puplava gives his weekly Market Wrapup and Rob Bernard checks in with the Fixed Income Report.

 

 

I am going to listen - But I really expect MORE OF THE SAME OLD, same old.

 

Here are the

BIG QUESTIONS that interest me...

 

1) If gold is meant to be an effective hedge against inflation, why is it outperforming almost all other measures of Inflation ?

 

dba5yr.gif

 

2) What does this outperformance mean for future Gold performance ?

3) Who owns the bulk of the Gold on this planet ? Does it matter who owns the Gold?

4) Is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not? = Or is it possible that an elite is creating a constituency to buy Gold at high prices, so they can unload their holdings?

 

5) Do you want to be holding, or having your country's Central Bank buying Gold while the elite unloads?

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I think there may be some incoherency here. But I see you mention Exter's pyramid a couple of times. If you focus on the pyramid and understand what it means for fiat/ conventional currencies, and on a global stage, then you might find some coherency.

 

First, Exter's pyramid needs to be 'internationalized' and applied to the global economy. 'Fiat' currencies themselves need to occupy a tier somewhere on that pyramid. I've found it useful to divide currencies into peripheral, commodity, and central/ reserve currnecies. As forms of liquidity they will come lower down on the pyramid closer to gold and further from assets in the higher tiers. So you could have gold at the bottom, with the US dollar [and perhaps Yen] above that, then perhaps commodity currencies above that. Peripheral currencies would be further up near the tier of assets. Remember that due to deflationary pressure monetary value is filtering down from the upper tiers through the middle tiers to the tiers at the bottom. Though the market may move opposite to this at times [the risk on trade] the fundamental movement is down.

 

The crucial point to grasp now is the relativity of value. Assets will depreciate in terms of currency... even as currencies depreciate in terms of more central currencies, or gold. In this relative scheme, a currency could both appreciate and depreciate. It depends on what you are relating it to; if to assets then currency appreciates, if to gold then currency depreciates. Everything depreciates/ deflates relative to gold. What does not happen in this scenario, is the complete erosion of the value of 'fiat'. It does not hyper-inflate, but instead actually strengthens against assets. As for 'money printing', it may soften the effects of a debt deflation, but can not over-come and reverse the process.

 

Hope that helps.

 

Yep I am hard to follow sometimes!!

 

However,

 

 

RH

""The crucial point to grasp now is the relativity of value. Assets will depreciate in terms of currency... even as currencies depreciate in terms of more central currencies, or gold. In this relative scheme, a currency could both appreciate and depreciate. It depends on what you are relating it to; if to assets then currency appreciates, if to gold then currency depreciates. Everything depreciates/ deflates relative to gold. What does not happen in this scenario, is the complete erosion of the value of 'fiat'. It does not hyper-inflate, but instead actually strengthens against assets. As for 'money printing', it may soften the effects of a debt deflation, but can not over-come and reverse the process.""

 

Is what I consider to be scenario 1 in a nutshell and the path we are most likely to follow and continue down! Thanks for transforming the incoherant to the coherant :blink:

 

Scenario 2 Is what Marc Faber is advocating will happen ! :unsure::o

 

Lets hope we follow 1

 

Regards

 

ML

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Yep I am hard to follow sometimes!!

 

However,

 

 

RH

""The crucial point to grasp now is the relativity of value. Assets will depreciate in terms of currency... even as currencies depreciate in terms of more central currencies, or gold. In this relative scheme, a currency could both appreciate and depreciate. It depends on what you are relating it to; if to assets then currency appreciates, if to gold then currency depreciates. Everything depreciates/ deflates relative to gold. What does not happen in this scenario, is the complete erosion of the value of 'fiat'. It does not hyper-inflate, but instead actually strengthens against assets. As for 'money printing', it may soften the effects of a debt deflation, but can not over-come and reverse the process.""

 

Is what I consider to be scenario 1 in a nutshell and the path we are most likely to follow and continue down! Thanks for transforming the incoherant to the coherant :blink:

 

Scenario 2 Is what Marc Faber is advocating will happen ! :unsure::o

 

Lets hope we follow 1

 

Regards

 

ML

 

 

I had to read that three times, im still not sure that i really understand everything that you have said.

 

i will read it again later.

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