The following contains excerpts from a commentary made available to MurkyMarkets.com subscribers on December 6, 2009.

A blinding affliction can be seen with the gold bugs. Make reference to a strong dollar and falling gold, and you must be a supporter of the central banks, as well as the powerful families with cross-border tentacles that stand behind them. In our case, nothing could be further from the truth. We must put politics and other biases aside if we are to understand the big picture, in order to avoid, and not be ruined by, what's around the corner.

Let's not forget that many of the rabid free-marketers and doomsday hyper-inflationists, many of whom were completely invested in gold & silver stocks, oil and foreign assets, would have been ruined and their clients bankrupt, were it not for Ben Bernanke and the central bankers of the world who bailed them out, in effect, by way of this year's liquidity rally that has elevated all risky assets. Those risky assets plummeted late in 2008 as the US dollar rallied during the initial deflationary decline.

"Deleveraging" is what the inflationists call what happened during the crash of 2008, and continue to call it. What the inflation side fails to see is that deleveraging is a necessary consequence of deflation, and that, despite a short-term reprieve that is just about over, the Fed is powerless to stop it. By repositioning themselves and their clients back into inflation plays, and going 'all-in' of late it seems, they are headed smack into the next leg down of deflation, and the next deflationary wave won't care if it takes many well-intentioned folks down with it.

Uncontrolled credit growth spreads like fire across an economy, spawning bubbles based on a flimsy debt foundation. Cheap credit ultimately ends up in the markets, pushing up asset values. But the problem is that cheap credit does not only propel higher the asset values in portfolio's of those who access the cheap credit, but all stocks and bonds his demand pushed higher, making everyone think they are richer. The last trade of the day, even if conducted by one motivated buyer using credit, and one seller, affects the value of all holders of that asset. If that asset's value is propelled higher, then every holder of that asset appears to be wealthier.

Others then use this newfound "wealth" to leverage up and purchase more assets on credit. This action multiplies across an economy the further the credit bubble expands. It isn't difficult to understand and envision the destruction on the other side of this when debt bubbles break and futile efforts to re-inflate them fail. That's what has been happening since last year, and is nowhere near an end.

Many in the inflation camp concede there will be no new credit bubble inflated. Yet they argue for a continued inflation run. Since the blowing of an epic credit bubble this decade gave us the credit inflation that catapulted gold and other assets to dizzying heights, and if that bubble is now deflating, why would these assets continue higher?

The Hin-DEBT-burg is burning and heading for a crash landing. Ben Bernanke's printing press cannot, and will not, stop it. The debt bubble was the elephant. The Fed is the mouse. Forewarned is forearmed.