Martin Armstrong on Gold

The critical key to understanding

HOW the

economy functions is this

perpetual shift between

money v assets

– PUBLIC v

PRIVATE

. Simply put,

DEFLATION

prevails as long

as the demand for cash

exceeds that of assets. The

key to the shift in this trend

will be the shift from PUBLIC

assets (CASH) back to

(ASSETS)

PRIVATE. We face

the beginning of this shift

with the

BIG ROLLOVER OF

2012

. In other words, we are

looking at €600 billion in debt

of Italy and Spain for starters

that needs to be rolled over

this year 2012. This is setting

in motion the rise in interest

expenditures in the future

that will blow out the deficits

that is so necessary to create

the

“inflationary” trend that

begins ONLY when the demand for cash shifts back to assets. This is the trend we need to see develop in

Europe that is a leading indicator to the USA trend. It unfolds

when we begin to see interest rates rise

that signals the shift in demand from

PUBLIC back to PRIVATE assets that many will perceive as inflation

and the breakout will then unfold in gold at last. Those who think gold will drop to it 1999 low based

upon the Great Depression ignore the fact the USA was not the debtor then by the creditor much as

China is today. So there will be

NO deflationary collapse any more than there will be a hyperinflationary

blowout. History repeats, but more like a Shakespearian play – the actors keep changing with time