ctindale,I think you are absolutely spot on in everything you...

ctindale,
I think you are absolutely spot on in everything you have written on this thread so far........except for one crucial point IMO. In all your arguments, you appear to assume that politicians and the governments they represent are rational thinkers in the face of mass vote desertion.

In the case of asset deflation, which incidently I believe is occuring right now, falling asset prices against stagnant or rising debt is about as painful an experience as one could ever hope to endure, and is the easiest route towards probable civil unrest and certain loss of government. The cure? Print money and print like you've never printed before.....give it to the people in hand outs, pay off their mortgages, write off credit card debt, basically do what you have to do in order to avoid the debt deflation spiral. The consequences of such action on the gold price or any commodity for that matter is obvious, and clearly longer term, devastating...but then that will be someone else's problem by then because there is a fedreal election every 3-5 years. That's the problem with giving power to democratically elected officials...they can always stall the inevitable until the next election...