phar lap and subarus, page-9

CT,

As usual you make great arguments - and with geat passion! - but I just don't see how it can play out the way you say.

If one day no one turns up at a bond auction, the Fed will just step in, as Marc Faber says. And they'll keep stepping in. And keep stepping in. I get your money velocity argument but who's to say the policy in GFC II will be the same as GFC1? Maybe the yanks will hand out newly printed greenbacks to their citizens this time... Maybe they'll buy homes from defaulting homeowners... Maybe they'll guarantee credit card debt... Who knows?

I don't know how it will play out but I think governments everywhere will fight deflation to the death - and it might come to that.

You're right about a reserve currency never hyperinflating but who's to say in this globalised world that it won't happen now? And if you think we'll get hyperflation AFTER deflation, which currency will hyperinflate then? The USD?

As for goldies - yes, they'll cop it with everything else but if you've already bought at the firesale, why risk trying to get in even lower when it may not happen? Plenty of no debt, unhedged, producing goldies with cash that will ride it all out IMO.

Cheers,

C12