I would agree that he thinks the dollar will hold its value compared to other currencies. What he doesn't say or address is, if it is in the same boat as other currencies, how it will maintain its value against hard assets? ALL currencies can devalue against hard assets. If the bond market breaks and foreigners and domestic holders start dumping their bonds, the only way for the dollar to hold its value against other currencies is for all other currencies to tank also. But in that case, they are ALL becoming worth less against anything that they are used to purchase (except other currencies). When money devalues, it takes more of it to buy anything.

I would agree that demand destruction will also take place as wealth (perceived wealth) is destroyed. In Weimar Germany people could not afford hardly anything so there was very little demand, yet prices priced in the currency rose. Prices can rise with falling demand. Witness corn right now. Price is not completely tied to demand. There are other components to price. The value of the money being one.

I'm not saying I am absolutely right. I'm not saying this for certain will be the outcome. The outcome will be determined by policy and the public's reaction to policy. What I am saying is that it is a possible outcome with a significant probability. Other outcomes are also possible. It is important for a person with some degree of wealth to consider all possible outcomes.

John