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<p>[QUOTE=&quot;InfleXion, post: 1324015, member: 29012&quot;]JCB, the person you are discussing with is making a few flawed assumptions in my opinion. For one, they are asserting that the market has certain expectations. The market is the sum of everybody participating in it, and to say that it has concrete expectations is impossible because not everyone participating will always be in agreement. Expectations can only be identified in hindsight, so to say that inflation expectations are more accurate than market expectations is an impossible comparison, because inflation expectations have an easy method to determine which is whether or not money supply is expanded.&nbsp; </p><p><br /></p><p>Also, regarding this statement:&nbsp; </p><p><br /></p><p>They are saying that they know what every smart and educated person thinks. This is an impossible generalizatoin and is ignorant to say IMO. I do think deflation is a greater concern than inflation, but that&#039;s the reason why inflation is a concern because they are determined to stave off deflation at all costs. There&#039;s no reason that monetary stimulus can&#039;t go on as long as these institutions exist because they can create more money any time they want, and realistically deflation would wipe out most banks because they are so highly leveraged. I would not expect to see deflation take hold until after hyperinflation, with mini-deflations along the way requiring inflationary responses.&nbsp; </p><p><br /></p><p>Nevermind all the insults and denigrations in this person&#039;s arguments. It&#039;s not someone I would feel good about trusting the judgement of. Having precious metals is in fact the best thing you can do to prepare for collapse of the dollar, if that&#039;s what you think will happen, because their value is intrinsic and does not have the potential to become worthless. If the dollar does survive, as long as monetary policy is inflationary then metals are the best way to avoid having your wealth stolen. In a deflationary environment metals won&#039;t be as good as cash (at least for as long as the government behind that cash remains in power which in my mind would be questionable in a severe deflation which would bring out more protestors).&nbsp;&nbsp; </p><p><br /></p><p>Lastly, to say the current world problem is Europe is just very short sighted. The problem is debt, and negative real interest rates are in effect in the US, China, and India as well. I think whoever is arguing with you either doesn&#039;t know as much as they think they do, or they have a vested interest in supporting the status quo. As I have stated somewhere before, a lot of the banks&#039; balance sheets are holding bonds which are government debt. To refer to these as assets is only a reliable way of looking at things for as long as that government is in power, and for as long as people are willing to buy those bonds. If the bonds don&#039;t sell, then all of them take a price reduction and those balance sheet assets will do the same.[/QUOTE]</p><p><br /></p>

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