Regarding: "Even it the credit deflation does continue, it won't end in lower prices for everything in terms of dollars. It will end like Iceland, with a government default and rampant inflation due to a collapse in the dollar."

I think this is one possible outcome. The other would be a further redemption in the US equity market, and that money going into buying our debt.
In addition, it will be interesting to see how much further the redemptions in the hedge funds will go?

Don't you just love an economy with trap doors.

editorialstaff net notes: The idiots busily destroying the US dollar are incompetent, in addition to being members of the criminal political class. Their opposite numbers in old Europe, UK, and other first world countries are far more expert, and uncaring about their subject's survival in this difficult economy, so they have buggered their currency with far greater efficiency than Barney Franks and his criminal co-conspirators have buggered the dollar. It will not prevent the horrors associated with the continuing decline of the dollar, but it will delay it enough to prevent our sovereign citizens getting wise to the defeatocrat's destruction of the dollar, and forcing us into socialism, and turning the traitors out of office, and the defeatists into a permanent minority, until it is too late.

OK--- To a fellow minyan, in efforts to better the community-- while I always value a perspective on precious metals (even though I have called you a gold bug in drag!), it would be valuable to overlay reasoning and timing in your commentaries.

Aside from GOFO potentially tracking gold like it did 1999--- why is this important-- what does it mean? Needless to say gold in 2000-2002 was extremely depressed.

You think gold will erupt-- mind guessing when? from what levels to what levels.

With all due respect, you have claimed gold to be erupting since $920... and while I may agree that it will erupt, there is a BIG difference if it does it from a $500 mark or $900-- the latter of course is past due.

I have heard many calling for the dollar to weaken substantially since July. But the dollar/Euro fell from 1.60 to 1.25. While I agree the dollar with have to _eventually suffer_, making the call at 1.60 does a trader no good if it starts to suffer at 1.25 back to 1.60-- then what gains do I have? This is why I continually criticize your reports-- specifically the open ended timelines, than the commentaries.

If your opinions were general market overview and long-term outlook, then my crticisim would be far different (not like you are looking for anyone's approvals). However there in a tonality in your writing that suggest to some readers some immediate action to be taken for a trade.

Todd Harrison and many other professors make this a clear distinction in their writings and opinions.

Respectfully yours-

Quit listening to Fox, Rush, Hannity, BillO, etc. You'll drive yourself crazy, just like the wackos at the Palin rallies in Dixie.

So the GOP controlled the white house, senate, and congress, until two years ago, but yet they are the ones you want to run the country further into the ditch? Which of Bush's picks do you think has done the best job? Paulson, Bernanke, or Chris Cox? Let me guess, you think Phil Gramm would make an excellent Secretary of the Treasury, right?

I'm sure the dollar will fall sooner or later but to consider a complete write off of the currency would imply that trillions in Chinese/Russian/European/Middle Eastern etc. reserves would be wiped out of any meaningful value. Such destruction of wealth would surely not be accepted by the governments involved. I would think that the markets may not be allowed to play this to the logical conclusion. Instead isn't it more likely that governments (G20?) will get together and agree to prop up the dollar collectively? This has happened in the past with the dollar, the yen, euro, etc.
Also the kind of monetary stimulus discussed in the article (monetisastion of debt/printing money to stem deflation) has happened in Japan in the 1990s also on a massive scale. Last time I checked the Yen held up pretty well.

Or is this simply wishful thinking on my part?

While the crash of the dollar is the logical outcome of the government's actions thus far, I am not convinced that it will come to this. Obviously the US will fight this with everything it's got. In addition, I'm not sure that the rest of the world is ready to completely shut down their exports to the US.

While Peter Schiff may not agree, I just don't see how the rest of the world can pick up the slack if US consumption completely grinds to a halt due to a worthless dollar. Do people in Malaysia, Columbia, Thailand really need 48" plasma televisions on the scale that the US has been buying them in recent years?

It seems to me that Japan and China will want to try to get US consumers back in a buying mood and will therefore coordinate with the US to prop up the dollar. While I think moves will be made to start moving away from the dollar as the world's reserve currency, I think it will be a long, drawn-out process, not a rapid crash of the dollar like Peter Schiff expects. Every time I start to lean towards his line of thinking I remember the saying:

"Markets can remain illogical far longer than you can remain solvent."

Lewis writes and re-writes the same gold bug article every week around here- maybe one day he'll actually be right like the broken clock.

With respect, Elias, some thoughts on timing. Prof. Lewis is usually a fundamental analyst; that school of analysis implies a trading method that is light on timing signals and long on patience. Recently, in noting supply issues in physical gold, his pieces have suggested a tighter timing regime than his usual. Today, in discussing backwardation, he has tightened up the timing call even more, to, like, today (with gold up $40 today, I feel like I'm cheating saying that, but oh well...still not in backwardation, though.)

I feel your distress, fellow Minyan - I often wish I knew more about the positions undertaken than is revealed. I end up reminding myself how fortunate we are to be given *some* useful info, rather than mourning the incompleteness thereof. (we each need to add some value to our own process, nicht wahr ?)

The only way to prop up the dollar is for people to buy them with other currencies. Where will they get the money, print it? Why not. Basically, the one who runs their money printing presses the fastest wins!

Frankly, with enough dollars floating around out there to buy everything in the USA, it is in the interest of the US govt to drive the value of the dollar into the ground and inflate the value of real property and equities simply for self preservation. Otherwise, everything will be owned by foreigners who will just buy everything with dollars.

I'll be posting this in a few areas...

Can anyone suggest some good web sites to trade futures (precious metals)? I'm not real happy with my current provider.

Thanks!