The Paradox of Inflation/Deflation." This is an excellent article and I recommend anyone to read it and ponder what he is saying. Armstrong must have really put a lot of effort into this one because unlike most of his posts, this one even has fairly decent grammar, spelling and punctuation - meaning he must cared enough about it to have given it a proof read or two for a change.
The premise of his article is that believing an increase in money naturally causes inflation is completely wrong because demand is missing from the equation. In other words, inflation happens when there is an increased demand for money (ie. people want to borrow it to spend or invest) which only happens in a growing economy/bull market. In a shrinking economy/bear market, people are not scrambling to spend/invest/borrow more, but rather just the opposite as they tighten their belts to survive. Thus, the demand for money declines and causes deflation. (ie. The amount of money printed is completely irrelevant to inflation unless someone is willing to borrow it). Furthermore, deflation then gets amplified by the government trying to raise taxes in order to make up for their budget shortages, which further causes deflation.
I hope I explained it right - it's a very worthwhile article to read.
The second article is by Charles Hugh-Smith of the OfTwoMinds Blog, titled "Could the US Become the Unrivaled Superpower Again?"
The reason why the dollar could rise, Hugh-Smith argues, is because as other economies around the globe implode, the confidence of the US Dollar will increase - because it will be seen as the safest place around the world to keep your money. The underlying point is again, it is all about confidence in the country itself, despite all the other shenaningans. If you are in Venezuala or Japan, you will want to get your wealth OUT and the safest place - where you will know that you will be able to actually have a functioning system to withdraw your money again, even if devalued - will still be the USA. (Until, of course, the day comes that people no longer have confidence the US system will be there tomorrow - THEN we will see a currency collapse with inflation because it will literally be considered worthless, regardless of money supply factors).
When I look at these factors, I can see why Armstrong argues that gold will likely fall in price - deflation will cause the price of gold to fall along with all other goods and commodoties... in US Dollars.
But what about for those people who aren't in US dollars?
Ultimately, even if the global economy places such confidence in the US System not collapsing that its dollar soars, as Hugh Smith suggests might happen, I know that my gold will - for sure - be worth something in five, ten, twenty or one hundred years. In other words, despite the strengthening value of the USD, my confidence in gold holding its long-term value is greater than the confidence I have over long-term in the US/Global economic system - despite what happens in the interim.