[LeGrande]

But if dollar continues to fall against gold or other commodities, the question comes how long other currencies could match dollar’s fall at the risk of high inflation.

This is what has me confused. Where is the inflation? Prices certainly aren't rising, interest rates are at historical lows, we seem to be going into a deflationary depression, what gives?

I know the Fed is creating money by the trillions, is it really as simple as the credit implosion sucking it all up?

[ChildOfThe60s]

Prices certainly aren't rising

I dispute that. Prices are indeed rising. Some of that has been masked by [temporary] declines in energy and artificially low interest rates and the housing market collapse. Also, a lot of low/lower prices on some consumer goods are results of inventory liquidations, a temporary thing.

But a casual look at what the average consumer needs to purchase and you see that a whole lot of stuff is going up.

- food
- insurance (low interest rates are forcing insurers to raise premiums)
- taxes
- auto prices (masked by cash for clunkers distortion)
- utility bills

And as interest rates rise, we will see that put upward pressure on all sorts of prices. And as the Dem stranglehold on production of energy production continues, energy costs will rise. Cap and trade is not dead.

[expatpat]

is it really as simple as the credit implosion sucking it all up?

Yes, I think it is. Banks like JPMorgan and Goldman Sachs (or AIG, as guarantor) are holding huge amounts of toxic assets because of the bucket-shop generation of bets of magnitude much larger (tens of Trillions) than the underlying bad mortgages. They are sucking up the $s and holding them, so as to maintain solvency.