If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue. Leverage isn't the only cause of insolvency.
If gold does plumment like that then we would have an ultra strong dollar, fear about the economy gone because it's doing so well and people are not looking for safety don't you think?
This would be awesome. How likely is it?
It will likely happen, eventually
. We just don't know when. The ongoing (sine wave like) private sector credit cycles were well illustrated by the Ray Dalio video
that Mdraf posted.
When the deleveraging in the private sector is finished, and the private sector starts re
-leveraging, you're going to see a lot of spending/economic activity pickup as private credit improves — just as the video explains. Government spending is simply trying to "re
flate" the damage in private credit.
It could take up to a decade to reflate a private credit hole of 2008's magnitude, but eventually it will happen. But, the nature of private credit is that it tends to be fragile. And then when the private credit bubble reaches the end of its next cycle, Peter Schiff will correctly predict the next private credit bubble, after years of wait-and-see predictions — and then somehow claim he was right about everything
all along. And his followers will eat it all up.
In a way, the PP uses those sine-waves to smoothly motor itself along.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.