That is a very good piece. I can see the problem here in the UK reflected in house prices, i.e. excessive leverage has jacked up house prices to 6 times average earnings when they should be 3 or 4 times. So, there is too much debt relative to the amount of money available to service it, which comes to people through their wages.

We're getting away with it because rates are so low but even at these rates people can't afford to pile more debt on top of the debt they already have. So, either, assets prices have to fall, which will make the banking system insolvent, or wages have to rise to restore a more realistic ratio between house prices and wages.

So, how to get nominal wages up? Flood the economy with money, not credit, by buying in the gold at $5000 an ounce (and maybe silver too at $300 an ounce) while at the same time restricting credit so assets prices can't be driven up any further (e.g. by only letting people borrow 3 times their income to buy a house). We get a huge inflation in the space of year or two but it has an end because of the gold peg. I like it :)