Hey Menta;"Debts that can't be repaid won't be repaid. So...

Hey Menta;

"Debts that can't be repaid won't be repaid. So default is the inevitable result. There is no other way out of it. And the default of such a massive amount of outstanding debt will swamp all efforts by central bankers to prevent it occurring. This is deflationary, not inflationary."

You are completly right, if they will default on there loanes.I dont think they will though, as they dont have too. The point is that in history "we" paid of such debt by inflating our currencies, so that the debt becomes managable again.

the Weimar Republic is a good example if that. They had massive debt to repay after WO1 and they (had to) inflated their currency so much, that in the end they had to bring a trolly to carry the cash around for 1 bread.

Thats why the gold bug are enthousiastic about higher debts in general; it will mean the goverments around the world will print their way out of trouble and inflate the M3; moneysupply.

And in my humble opinion, if they would default on their debts; everybody will get rid of the useless and worthless paper and the currency will collapse. Would you like to hold an IOU which you know they wont repay? And guess what will happen to gold then in relation to that currency??

Cheers