I don't think the public can quite grasp the concept yet of their money becoming worthless but they do have a genuine fear of not being able to get their hands on the folding stuff.

When the rumours were flying around re Northern Rock over here in the UK, people were camping out trying to get their savings out. Government reassurance that no-one would lose out didn't matter, they wanted that money out of that bank. Once they got hold of the cash they thought they were safe and promptly deposited it in another bank.

Now imagine hundreds of banks going under and being bailed out, a daily drip drip of news stories of another institution either failing or being forcibly merged with another institution. That could well happen if real estate keeps on falling and the Credit Default Swap market implodes as the economy worsens. Eventually the system will just run out of available capital and the Fed and every other central bank will have to monetize to bail these institutions out.

I think this is when the public will catch on. There will be this growing uneasy feeling that they can't trust the banks with their money and they will take it out and buy something with it, whether that be gold, a house, stocks or just stuff. The Fed and the rest will have to print it or close the doors, either way fiat money is toast at that point. This might start to happen gradually but will likely accelerate as the rumours start to circulate and inflation really starts to take off as money velocity rises.

I don't think we can avoid this end game now, there is just too much debt in the system to allow the free market to let rip and liquidate the debtors. The authorities can just slow the process down by trying to keep everyone fooled for a while longer. After the US elections the brown stuff will really start to hit the fan.