I've read the writings of Peter Schiff and Karl Denninger quite a lot for the last several years.

 Peter thinks we are headed for hyperinflation and gold/silver is the safe haven.

Karl thinks it is a huge deflation that is coming (we've already had the inflation over the past years) and gold is not such a good place to be. His argument centers around the Govt. cannot afford inflation on the vast amount of social program payments tied to cost of living increases and huge inflation would ramp the interest on the debt which would would explode with hyperinflation. 

As a saver / pay as I go type  I'd rather see deflation but with the huge amount of the population in debt they all want to see massive inflation to see their way clear and pay things back with cheaper dollars instead of deflation where things are paid back with more expensive dollars. 

I can see the argument both ways.

Mr. Denninger has been pretty much right in my view in all his predictions of how things happen and what is about to come and how we need to "stop the looting and start prosecuting" however the Fed always wants to inflate their way out of the problems and will fight to go this direction every time instead of taking the painful medicine that needs to be taken.

I respect both of your opinions very much and wonder if you can add any clarity to what you think will happen.

This is the chart Mr. Denninger has that shows the seriousness of it all. The entitlements now are consuming all tax revenues as of today. The rest is all borrowed money which includes defense, interest on the debt and all other programs. The foreign entities will not keep buying our debt and at some point will shutoff the credit spigot. 

There are some really hard decisions that need to be made but we lack anyone that is willing to even discuss this on a mature basis and tell people we are in serious trouble and things cannot continue as they have been.

This chart has been shown before but it was posted again in another blog entry courtesy of Mr Denninger.

 http://market-ticker.org/akcs-www?post=167032

These are complicated terms and ideas which is why I think so many people don't understand what is really going on. I hope I've distilled the argument into something that accurately represents his views. I think his daily tickers are required reading to see what is really going on.

Would greatly appreciate both if your insights into all of this as I value your opinions greatly. 

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