I guess the logic behind it was that F&F have a 5 trillion $ balance sheet, leveraged 150 to 1.... That combined with say a 30% default rate (as more or less happened during the depression in the 30's) should cost the US taxpayer at least a few trillions which the US doesnt have so they will have to print it thus driving down the value of the USD and propping up commodity prices including gold. Now, about a year or 2 into the crisis the US has not only taken on the liabilities of F&F but also those of trillion $ balance sheet monsters such as AIG or C and the government has also recapitalised Wall Street using Tarp which is running dry as we speak I believe. I guess we are at the crosroads of a lost decade as they had in Japan or Weimar Germany destroying the value of paper money. So far the $ has held up relatively fine both against other currencies as against gold so I'll be curious to see how this evolves into the future.