Tony, your point about deflation is excellent. Let us carry it further... the US economy drops by several trillion dollars. (It is well on the way) The market loses a huge lot of dollars in value. Infaltion takes off like a rocket due to overprinting of cash. The US devalues their currency and reverts to a gold standard. Gold settles down and goes to about $300/30 g.
Remember the Rentenmark in Germany after ww2? Big revaluing there to get things back under control.
Gold standard means the economy grows slowly but steadily, and credit booms don't happen easily. It is the new credit morality coming into play. Credit may even dwindle away..mostly..debit cards could be the go!
As for who uses gold, it's the dowry and decorative heart of Indian society, and computers and electronics use it. Do dentists, still, for amalgam? Not sure on that. Coin collectors and governemnts ..and the rich..still stash it. Gold leaf in crafts, on food (!) and on statues/carvings chews through its share.
YOu can buy books of gold leaf for about $50, but it's impossible to handle as it's so fine it crumbles at a touch. You can already buy little bars of gold and small coins. Nice for trading.
