At this point, the recession portion is obvious. Whats not so obvious is the commodities portion. This has actually been the only bone of contention between the inflation and deflation camp. Inflationists think the govt plan to bailout the markets will work, through monetizing. Deflationists think that the gov will try and fail. A bet on gold is a bet on the govt successfully monetizing our debts without the treasury market taking a dump. In the short term most people that I’ve read, if bearish on gold are so because good assets and bad get sold off to pay back debt.
Josh
