morph366

China Wants a Global Currency? Here's How

The problems that I see with your proposed solution are:

1. It is not clear that the mature, post-industrial economies, with the exception of those endowed with lots of natural resources (e.g. Canada and Australia), have sufficient goods and services to offer emerging market economies to really address the fundamental imbalances in current account
2. Many service based businesses in the US are inherently localized and do not provide an exportable offering.
3. It is not clear that emerging market consumers with discretionary income will exhibit similar appetites for binges to those indoctrinated with the notions of "lifestyle entitlement" ("Spoil yourself - you deserve it") which is endemic in the US, and elsewhere such as the UK and parts of the EU.
4. Prices of US produced goods (and the wages for those who produce them) would have to come down a lot in order to be affordable even for the aspiring consumers in the BRIC world.
5. More pertinently prices would also have to erode further to be affordable to the domestic consumers in the US and EU if, in the spirit of unregulated exchange rates and freer trade, there were no longer the protections supplied by these governments to "manage" trade and macro-economic policy.

There were many reasons behind the bubble of the early part of this decade as alluded to in the post from Cautious Investor, and the suspicion is that the new efforts to inflate the bubble again are a recognition that a laissez-faire approach with freely floating exchange rates, free trade and other mythology from neo-classical economics does not provide a solution as proposed.

Economic Fault Lines Emerge

This is a wonderfully evocative sentence from your article:
"Obama is pouring grain alcohol into the punch bowl hoping to lure the walking zombies back onto the dance floor."
To slightly extend the analogy to musical chairs we would all be wise to make sure that we are not holding lots of paper assets when the music stops.

Quantitative Easing and the Disappearance of Income

Re John Lounsbury
You make a very valid point as to how a fund manager might be able to juggle the maturity transformation process with the market timing assumptions suggested.
It is perhaps a validation of the overall thesis that current fixed income streams are insufficient - part of the deflation scenario that was being outlined in the article - and that fund managers are having to resort to speculative re-financings which will (hopefully) benefit from the (un) intendended consequences of the QE strategy.
This I believe is the point that you are making?

What Is Going On With Gold?

I think that the key remark you make about the dollar is that it is the best of the worst - something like when Churchill said that democracy is the worst form of government apart from all of the rest.
If one was planning to take out insurance against the US government going bankrupt and the dollar collapsing who would be a reliable counterparty?