We argued here yesterday that although hyperinflation is remotely possible, it will not be the result of a political decision, since the consequences would be too grave, devastating the savers who are the life's blood of credit markets. If hyperinflation does come, we believe it can do so only via a mortgage bailout effort that mushrooms out of control, eventually encompassing all debtor households. Our essay elicited an interesting response from, among others, 'Karl,' a self-described gold-bug with whom we have corresponded regularly. He believes the powers that be made a conscious decision years ago to hyperinflate, and that the process is designed to transfer wealth to those who silently rule our financial lives. Karl's thoughts, immediately below, are followed by our brief response. Metals Hold Key 'I found myself nodding my head in agreement with your latest. I think the point that is lost on many who are in the hyperinflationary camp is that we want to equate a parabolic rise in prices being the end result of whatever the Feds of the world are doing. I want to equate this to the metals and what it may mean down the road. 'First off, I don't feel that we need to see a Weimar-type scenario for the metals to continue higher. The bottom line is that the rest of the world still looks at gold as a monetary metal (or a store of wealth) and acts accordingly. That we took Our currency off the gold standard was because the accountability that gold held bankers and countries to, became too restrictive. Gold and silver have always been money, and as much as we in the U.S. haven't looked at it that way since Nixon took closed the gold window in the early 70's, we still need to look at the
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