Adam Katz

Gold Price and the Money Supply

cruiser,

Deleveraging has only just begun. I definitely agree that this deflation is caused by deleveraging - I just think that it has a long time to go. As equity values have come crashing down - D/E ratios have skyrocketted. On paper, companies are more leveraged today than they were before the crisis began. Cash is king during deleveraging. This gives some attraction to gold as well as it has value as a currency. However, cash, the asset being demanded in exchange for deleveraging, should outperform all other assets. Will this end with it being the peak value of cash? I don't doubt it...