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Old 11-08-2008, 10:57 PM   #6
Zarathustra
Avalon Senior Member
 
Join Date: Sep 2008
Location: Eastern U.S.
Posts: 429
Default Re: people being herded into gold for the kill?

Quote:
Originally Posted by Mike_Jetson View Post
A flood of gold that has been secretly held back will surely cause deflation.

One example that popped into my mind was if a currency change from dollar to something else was to take place at the same time as massive gold deflation but a lot of folk had no choice but to cash in their gold for new currency then that wouldnt be nice
Any deflationary effects are temporary, because we have an economy based on a fiat currency, of which our wonderful FED has a love of printing only bounded by how many keystrokes on a keyboard Bernanke can make in one day. The downward pressure on gold and silver currently is done via manipulation of the Comex, which cannot fill outstanding orders. When the temporary dollar rally ends, and it crashes, gold and silver only have one direction to go, especially if there is a new global currency backed entirely or partially by gold/silver, which would be the reason for governments to hoard it, other than the reasons that we all should be holding it, of course - it has value based upon its limited quantity, unlike the dollar, which is nothing more than an IOU backed by colorful paper.

Z
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