TJ, with Lehman shareholders, along with Fannie, Freddie and a lot more besides having been wiped out, along with creditors of Obamamotors, nee General Motors, and untold other mortgagees in various ways, negotiated or not, it is already in the bag that a lot of your second choice did happen, with more to come. With QEII having had her very wet jubilee here in Queens Park, England, and her 60 year reign continuing as we speak, we can expect the even longer lived QE process of monetary dilution to continue apace to QE III, QE IV, QE V before an interregnum arrives by hook or by crook. So your first option is already in the bag too, at least in part.
(i) add two (2) zeros to money of all nations of this galaxy, or
(ii) subtract (2) zeros from debt of everybody in this universe
So, either gold at 160,000 or 16.
In financial relativity theory, the mathematics gets quantum entangled at warp speed near event horizons leading to Black Scholes singularities, so it's not a metaphysical certitude that gold will stay right where it is, but perhaps gold will split the difference, with a zero removed from all debt with a zero added to all money.
Being both a saver and a creditor, that seems eminently reasonable.
Gold could thereby stay at $1,727 from 31 December 2012 forward, with everyone living happily ever after.
For a while anyway, while the new sovereign looms out of Cyberspace into the temporal realm which will supersede both US$ and gold, which might maintain relativity with each other as each sinks into Newtonian monetary irrelevance while Einsteinian financial relativity theory goes from zygote to zeitgeist. Sort of like chimps continued to live in their forests while cro magnons migrated to England and built the industrial revolution. Gold will still have a market among Aztecs. US$ will still function in Peoria. People in Hong Kong will still barter with them.
Three cheers for the Anglo Cro Magnons.
Mqurice |
