Fekete is basing his predictions on his study of money in historical terms. In that perspective what he is saying is that no paper currency that did not have a commodity backing of some kind has ever survived. The temptation for the people in power to debase it to nothing is just to hard to resist. What he is describing is a very dark world indeed and I sure hope he is wrong but to some extend betting against him is to say it is different this time.

In Rome when gold went into hiding it was buried for retrieval later.
They are still finding cashes of it to this day.
It was never safe enough for the original owners to dig it up and use it again.

If people loose their faith in government money and institutions then all you have left for trade is barter.
What the backwardization on the comex is saying is that the process has begun.

The solution is a commodity based money system that has its value based on something tangible.
My hope is that at least 1 government in this world will see this and do something before it is too late.

Fekete thinks it is too late already.

ebear already posted Mish Shedlock's reply.

http://www.howestreet.com/articles/i...

The difference between the deflationists and inflationist is their interpretation.
Deflationists see falling prices and interpret it as evidence of deflation.
Inflationists see massive amounts of currency being created and see inflation coming.
I think ultimately the inflationists will be proven correct.

1. If people loose faith in their money they will hide in things that are real.

2. A currency can loose its value faster than other goods for the simple reason that it can be created with much less effort than anything else.