let me know if you get an answer, I need to know too.
no answers... but this is a pretty good, concise explanation of the problem:
http://online.wsj.com/article/SB124458888993599879.html
scary graph too.
“With an increased trust in the overall banking system, the panic demand for money has begun to and should continue to recede. The dramatic drop in output and employment in the U.S. economy will also reduce the demand for money. Reduced demand for money combined with rapid growth in money is a surefire recipe for inflation and higher interest rates. The higher interest rates themselves will also further reduce the demand for money, thereby exacerbating inflationary pressures. It’s a catch-22.
“It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.”
everything points to gold...
http://ezinearticles.com/?3-Investments-to-Hedge-Against-Inflation&id=2285781
my hesitation is that i don’t want to be the one who bought gold at ‘81 prices and has to hold it for 30 years. but i guess all signs are pointing to mid 70s, not early 80s, even though gold is breaking $1000/oz.