Thanks.

I hope someone benefits from what I write. I benefit from writing it because if forces me to clarify and sharpen my own thoughts that otherwise I tend to keep in a "fuzzy" state in my brain. In other words in kind of an undecided no-mans land. By being forced to clarify my thoughts enough for others to be able to understand them, I have to also clarify and solidify my own position.

You almost answered your own question.

"I understand the net surplus of debt being stored in dollars, ie bank your wages and sit in cash".

"Bank your wages and sit in cash". Why do we hold money? Money serves two purposes. It facilitates barter working to facilitate transactions. And it stores value till we need it at some later time. If I always had the oranges you wanted and you always had the apples I wanted and we both always wanted them at the same time we would not need cash. We would just trade items. But then you already knew that, so why the long explanation? Because we are using cash as a way to "store" our labor. We work today but do not have an immediate need. We "store" our labor in the form of cash. So when he says the cost will be socialized, he is saying the money we hold as a "store of value" of our labor will be debased. Loose value. Will purchase less. So everyone that is holding dollars (or dollar denominated instruments like bonds) will be the ones that pay. The cost is socialized because all the money will buy less. It has the same effect as if the government would have raised taxes, but the burden does not necessarily fall on the same people. When the value of money is destroyed the burden disproportionately falls on the middle class and poor. The wealthy have assets that tend to maintain value. Essentially the inflation "tax" is on every single item we buy. I hope that made sense. So the lip service we get from the powers that be say they are trying to help us by stimulating the economy are pick pocketing all of us at the same time.

You said: "The danger scenario in my mind is when bonds are no longer considered a safe haven, those $ will seek other assets/sectors, at high velocity, all the while competing for Gold"

Gold will only be the minor problem. Most people don't have to buy gold. They buy groceries, gasoline, rent, household repairs, etc. etc. The money coming out of bonds will go to many different "real" assets, causing very high price inflation. Gold will become a little bubble blip that those of us holding some will benefit but the majority of the pain will be born by ordinary, average working people. When you destroy the money people depend on, it is like cutting off their legs at the knees. And this is what they are doing on purpose. They are openly stating that they are devaluing the money, for anyone with enough presence of mind to listen. They are telling you they are picking your pocket, all the while telling you they are doing things to "create jobs". By debasing the money it has the same effect on current wages as lowering wages. How do you think they are expecting to export more? On wages that have been saved up (in savings, checking, government bonds) it makes them worth less. Currently with negative "real" interest rates (interest rates lower than rate of inflation) the borrowers are being rewarded (or helped if you prefer the term) and the savers are being punished.

As far as the train coming at us, there are some very bright people that have seen this coming for a lot of years. Guessing when the tipping point will be.................. it is tough. I sure don't know. I think the best we can do is try to be prepared without going overboard (if a person was prepared 20 years ago he would have been on the wrong side of some things a long time - like me on fixed interest rates). Having both eyes open and realizing what is coming our way hopefully will be enough to put us in a much better position than others that will misplace their faith in our government long past when they should have.

John