The Dollar

Jesse's Cafe Americaine reminded me today that the Treasury bond crash of 1932 came as a result of dollar devaluation.

I need to think about this some more, but if it is correct, it means that Treasuries can collapse despite deflation. In this environment, the Treasuries are not a bet on inflation or deflation, but on the value of the dollar. If this is correct, it means that betting on deflation means I short Treasuries and buy more gold. I short Treasuries because deflation has been and will continue to be met with dollar devaluation policy from Bernanke and Geithner.