I haven't had a chance to do more than glance at the article at this point. I will read it in depth later.

It strikes me as an apples and oranges comparison to compare the 1929 era depression with today. The country was much stronger then with vast reserves of oil and a very strong currency; the U.S. was also the manufacturing power of the world.

There was another huge fundamental difference; namely the gold standard.

The government was limted as to what it could print in currency; so the dollar remained strong. When "hoarding" gold was made illegal and the populace was required to give up their excess gold, the currency was devalued to some extent relative to gold (35 to 20 dollars per ounce) but nothing like what has taken place in the intervening years. For a while we had a two tier gold standard where the public could not own gold but dollars were still exchangeable by foreign countries. Charles DeGaulle called the United States on their money printing and then called their bluff. It got so bad in the 70's that Nixon would have divested the United States of their entire gold hoard had he not chosen to default.

From then on the world was on a paper standard and what took place since then has led us to where we are today with the U.S. dollar currently being worth about $0.03 of its former value. Some of that but only a small minority took place prior to 1970.

There is no going back at this point. There is no way without a manufacturing base to pay back what has been borrowed. So which way will the U.S. default?

It will be easier on the U.S. and the rest of the world to continue printing, continue devaluing the dollar, and hopefully, gradually to move the U.S. to its new and much reduced world status. Politically no politician has the guts to do what Volker did and the economy couldn't take it if it were attempted. So the great crash projected by the long wave analysts is taking place openly "in secret" as the dollar continues devaluing. It will probably need to get to approx 1/2 to a 1/3 of its current value to "square" things. This is the grand purpose of a Dow/Gold chart. It shows that in spite of apparent value the Dow is and has been crashing since the start of the 21st century. Whether the Dow goes to 1000 or the Dow goes to 30,000 makes no difference, the Dow/Gold ratio will fall to 1 or perhaps a little below.

Bernanke, before he got the job as money printer in chief announced to the world that he would print money and throw it out of helicopters if necessary to prevent deflation. On this one point I actually believe him.

Regardless, the purchasing power of the dollar needs to come down with respect to the other world currencies and gold helps one to maintain the purchasing power of what they already own. In some few cases it can increase wealth but that is not the "prime directive" with gold.

Here is another viewpoint on the same subject.

http://www.321gold.com/editorials/thomson_s/thomson_s_010510.html

The summation is in point #23.

P.