RE:This evening could be more interesting than I thoughtReally interesting take ardbegoil.
China has a lot of USD assets. USD craters the value of those assets hits the ground. But China also has some major food issues. 1/3 to 1/2 of their pig herd is dead. African swine flu. They need soy beans. They need grains. All of which are available from the US in US dollars.
The very smart people who run the Chinese economy are going to point out "You can't eat gold." and that a well fed population is willing to put up with a lot of political BS.
Yes, China will Hoover up gold and silver but I doubt they will dump too many USDs to do it. Not this instant.
My bet is that there will be a deflation in the US before there is an inflation. As one bright person put it, the water recedes from the shore before the tsunami hits.
The big precious metals gains, the $40 up days for gold and the $4.00 up days for silver are a little way out. First the markets need to adjust to 10-15% decreases in GDP, 20% unemployment rates and understand that "printing" can only go so far. There are real asset crashes coming.
BHS will have a mine on line shortly. A profitable mine at $12 silver, a stupidly profitable mine at $18 and a full blown gusher (to mix the metaphor) at anything over $20. Way too slowly GO is bringing the BHS mine on line. At which point BHS coins (in a literal sense) money.