If the market goes drastically down, wouldn't that essentially be the destruction of the supply of dollars? Hence, contraction. A prompt reaction by the fed would be to pump that money back into circulation, but does that necessarily bring hyperinflation, or any more inflation than already being experienced?

I, as well as you Mr. Bull, am also 100% invested in PM's and wonder if for some reason a light bulb went on in "Helicopter Ben's" head and he suddenly had a moment of clarity and decided to cleanse the system of malinvestments and end the velocity of M3 as Volcker did by raising interest rates through the roof.

I Checked John Williams SHADOW STATS site to check on his recent view of M3 and it has changed little as of 8/16. However, today I see that Lombard street research issued a statement:

"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.

http://www.telegraph.co.uk/money/mai...

Financial Sense refers Lombard's articles under the Economy section so I figured they were a credible outfit, but somehow they claim that M3 has fallen from 19% to 2.1% in one month.

The real question lies in this scenario: 600 banks fail and go under, won't deflation occur???