it will dawn on everyone someday soon that debt creation is simply not happening anymore because of the unproductive debt that already exists. The concept of sustainable debt must be introduced for the continuation of debt creation/ maintenance of monetary velocity.
We will see an overshoot to the downside as the systems attempts to reset itself to the equilibrium point (debt supply is managed sustainably with equivalent growth and debt retirement). The overshhot is necessary as this will flush out the most unsustainable organisations (those with greatest leverage). once they are gone the system can rebuild.
GFC1 didn't allow for the purging of those responsible. They were too big to fall. Well I disagree. They have to fall and make way for the sustainable way.
Gold will fall too in the reserve currency (liquidation for a variety of reasons). Anyone note what happened to POG in non-reserve currencies???? I think the events that unfold around gold tell us exactly where the problems lies (US) where the greatest amount of unproductive and unsustainable debt lies.
For australians who buy gold it is a time to hold. I am thinking of selling a little on the spike (take profits) with a view to buying back a little down the track.
