Deflation & Inflation VS Gold

Deflationists View: Deflationists discuss that, with private and public debt at record levels and growing with unrestricted abandon now, the debt will never be sustained or paid off. They say it will be liquidated through default. As bankruptcies happen, banks will fail. Fearful investors will scramble to unload their bonds and stocks. A crash will ensue. Facing such a scenario, gold becomes the asset of last resort, and very probably the only asset that is not cash (one-hundred dollar bills) worth owning. Some analysts predict gold prices in the thousands of dollars in such scenarios.

Inflationists Vie: Inflationists show a different option. The Federal Reserve might be obliged to print money (monetize debt) in ever-increasing increments to maintain the government operating. This paper blizzard will wend its way through the economy, pushing prices to be more expensive and higher. Exporters to the United States, especially oil exporters, will be obliged to constantly ratchet up prices to get real value for their exported goods. Since oil particularly is the lifeblood of the economy and is a cost component of almost everything we consume, all prices will be pushed even higher. Inflation would then start to compound itself. The situation might become exacerbated, pretty much as it did in the late 1970s, just that this time the inflation is totally out of control. Hyperinflation ensues, and the price of gold will reach unlimited proportions.