"Can you have both a rising stock market and rising government bonds? Gee, I don't think so."
To save the stock market they need to print; but print they trash the currency and bond market. What to do?
Richard Russell has suggested a gold reval to $5,000. Here, Jim Rickards suggest $5,500 to keep the faith:
Another attack on gold is that there's not enough of it to support money supply; but of course there's always enough gold; its just a question of price.
The U.S. has never truly gone off the gold standard. The U.S. gold hoard today has a dollar value equal to about 20% of U.S. M1 money supply - a respectable ratio even in the heyday of the fractional gold standard. A gold price of $5,500 per ounce would comfortably support a broader U.S. money supply on a one-to-one ratio and maintain confidence in the dollar and U.S. sovereign debt.
Is there an exit? One path involves hyperinflation to destroy the real value of debt followed by redenomination and a new paper money game. The other path involves a gold backed currency at a non-deflationary price. This is a choice between denial and frank talk. Sound money leads to sound growth and the creation of real, not illusory, wealth.
