When a country has debts, a huge debts, there are several ways to repudiate it:
1) pay it off
2) default
3) inflate it away
4) settle with its lenders with other assets
Option 1, not possible because people get used to debt financing brought prosperity. they will not tolerate deflationary depression brought by austerity.
Option 2, possilbe but its currency goes down with it.
Option 3, most likely
Option 4, possible but who will give away Yellow Stone Park for the debts? American citizens will not allow it.
So what will gold do in option 2 and 3?
A long term investor shall not care day to day price fluctuation. He should focus on the conditions that caused his investments rise. So far, conditions have not changed. Will not likely change for long time to come.
By the way, do you know why M2 or M3 (per shadow stats.com) stay as it is?
A: becuase this is a deflationary depression. FED's newly printed money has been cancel out with bad assets on banks' balance sheet. Someday, not too far away, they will cause high or hyper inflation.
