I'll keep it relatively brief, but it is no less potent for that, if true.

Having spent a lot of time thinking about the world's financial mess, and planni
ng my next moves, the conclusion I have drawn is as follows.
1. How the debt debacle will end.
Let us begin with a simple truth - debts which cannot be paid, will not be paid.
The only question is how to keep the (developed) world from social collapse whi
lst the process of (bottom line) default is undertaken.
a) National debts.
The answer for debtor nations is simple, and there can be only one to avoid coll
apse - the debts must be devalued by inflation, and shared amongst as many peopl
e as possible, including multi-generations. This is "goldbugs and fiat currency
101", so I shall quickly move on to the big one.......
b) Derivatives, bad loans, and debts backed by unrealistic asset values.
I have seen the solution to this before, on a much smaller scale. I'm sure you a
ll have too - and there is an eventual upside for the 'privileged', which is as
good a reason to value this theory as any.
The bad loans and toxic paper will slowly but surely be accumulated into a few c
hosen patsy' institutions. This will be done by mergers, buyouts, and trades. As
this happens, the patsies will fill will junk, but the others will clear their
books and prepare for the final endgame.
At a convenient point in time, the patsies will simply blow up and default - yet
more news of "Once in 100 years" events will shock the world and roil markets.
The remaining (now cleansed) institutions will be 'persuaded' to save the day by
buying the 'blow-ups' at firesale prices, effectively revaluing the former toxi
c assets at realistic prices AND creating potential for a profit on them.
The chosen few will prosper from this 'lowered bar', whilst the chosen patsies c
arry the can for everything and the $multi-trillion derivatives nightmare will,
effectively, be over.
Many will be wiped out as they fail to realize that their investments are linked
, by a long chain of dominoes, to derivatives and investments which fail in the
default.
2. The fallout.
a) Gold.
Default is deflationary as it destroys money and BUYING POWER, leaving those wit
h cash and buying power more able to negotiate for goods. this, I believe, is wh
y gold dipped on the original Dubai news.
However, whilst the accumulation into the 'patsies' is underway, and smart money
gets wind of the ruse, gold will catch a bid on the fear of chaos and as protec
tion against the endgame going horribly wrong for its architects.
This means that the deflationary tsunami of unprecedented default might whack go
ld, yes, BUT from a much higher level than today. I am happy to hold (physical)
gold at current prices. I hope to add in the new year as I think we will test $1
,000 again.
b) The survivors.
Just as some will be chosen as 'patsy', others will be annointed to rake in the
profits of firesale prices. The key will be to identify which is which as the se
tup proceeds, wait for the defaults, and buy the other side of the trade before
(almost) everyone else realizes what is going on.
3. So, who is who?
Pure speculation, and nothing more............
1. Bank of America, a perfectly respectable major bank, have trouble getting a n
ew leader - noone, in the industry, can understand why.
2. HSBC kick out perfectly good customers from vaulting gold with them.
Unlike other products, gold storage is, I imagine, made on a per-bar basis. Sure
ly, then, one bar is as good as the next in terms of storage income.
Why would a bank wish to turn away the exact type of person (rich enough to stor
e bullion in a vault) that they are (or should be) seeking to attract as busines
s customers? Prying eyes unwelcome, maybe? A blow-up of unprecedented scale, inc
luding the mother of all global shocks... a "Madoff of Gold"?
3. A small country, financial services-based, and good enough 'friend' to the ma
in perpetrator to be able to believe guarantees promised for taking the ultimate
hit?
These last three points are, as I said, pure speculation. I introduce them only
as a catalyst for discussion, not as part of the prediction - which ended at "ac
cumulate, default, and fire-sale".
Just thoughts.
best of luck.