If you hear his podcast from November 2006, you will see that he predicts a deflationary downturn first, with falling commodities prices and rising dollar, as credit and consumption collapses (right so far). He then predicts that afterwards a severe inflation will follow as the government fires up the printing presses to "jump start" the economy.
He also says that instead of defaulting on the debt, the US will likely use inflation to "cheat" the creditors by paying back with worthless currency.
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