Shannon Melton

The Fear Bubble: Treasuries and Gold

No. Deflation is NOT falling prices, deflation, by definition, is a contraction in the amount of currency available. Falling prices and interest rates are a RESULT of deflation, not deflation itself.

Prices and interest rates are falling right now in spite of INFLATION -- that is, the printing of more currency than ever in history. These falling prices are part of the deleveraging process, and when it's over, inflation is going to destroy the dollar. Bernanke may think he's smart, but he's not THAT smart.

Add to all of this the fact that the Chinese hold trillions of dollars in Treasuries, all it's going to take is a whiff of smoke, and they'll start selling.

Try to remember that we have always been a creditor nation in previous collapses.

Paco Ahlgren, Peter Schiff, and other Austrians have been predicting this for years. Everyone should listen to what they have to say. In fact, Ahlgren just wrote a series of articles dealing with this very issue. I've been posting them here for a few days. They make all this much clearer.



On Dec 17 11:01 AM bricki wrote:

> Haha you think delevering 54 trillion dollars of debt is not going
> to soak up the piddling into the pond the Fed is doing?
>
> We are into the biggest deflationary crash in world history. This
> is not the great depression replay here. It is much worse because
> the bank's leverage is much higher.
>
> Hint: what happens when something goes scarce? The price goes up.

The Fear Bubble: Treasuries and Gold

Paco Ahlgren's latest blog about Treasuries and Gold:

experienceiseverything...