"Re Tim Price's report - While I am sympathetic to Tim Price's "sovereign debt endgame" view and am certainly not bearish on gold, I do take issue with the highly emotional 'Austrian' view of the world. Do the Austrians and Mr Price seriously think that Western governments will allow markets to be a threat to our existing way of life or for that matter our system of democratic government. We have fought major wars to protect our way of life and system of government and if the threat to this from markets becomes too great then governments will act be it banning short selling or even hedge funds, introducing exchange controls, forcing investors to buy government bonds, printing money etc. The same people were suggesting that Bernanke et al should not have intervened in 2008/09 and instead let the whole system collapse "thus flushing out the bad companies". They were wrong then and they will be wrong again. Whether it is nationalising RBS, limiting Goldman's business or banning short selling - governments will probably sadly become more involved in markets. The days of the free market are probably sadly in decline which in itself is bearish. The other observation is that highly emotional people do not tend to make good investors."

David Fuller's view Many thanks for these views and I agree with much of what you say. However in my observation Austrian School advocates often view the world with the emotional detachment of lab technicians conducting experiments.

Austrian economic policies are a good idea if a government and its citizens have managed their financial affairs on a fiscally prudent basis. Some have but many have not. Unfortunately and to state the obvious, the state and its citizens will be better off if they do not become overleveraged debt junkies in the first place. However when the patient is close to expiring on the ambulance stretcher (4Q 2008 to 1Q 2009), remedial action is the first priority. The lectures and lifestyle changes are best left until recovery has commenced (2010 and counting).

I am a fiscal conservative but I sometimes wonder if Austrian School advocates have thought through the social consequences of inaction which allows the system to crash. The savings of prudent households would be lost; many viable businesses would collapse; our children would lose their jobs as unemployment soared; our grandchildren's futures would be imperilled; suicides would soar, etc. There are more compassionate routes to fiscal prudence.

Some people think that these dire events will occur on a mass scale anyway. I disagree.

Lastly, I do not feel that free markets are in decline. More people are participating in free markets today than at any other time in human history. However, markets require enlightened and pre-emptive regulation to curb abuses, so that companies can raise capital, owners can realise some of their investments and investors can participate in corporate growth.