"...All you have to do to keep prices low is to sell in equilibrium with demand. The only people that can play this deep are the national treasuries and central banks. They could sell for years and keep prices low..."
That's true, but central banks are actually buying right now, not selling. However, they could be selling paper gold/silver futures, while buying physical. That, in fact, is a very likely scenario. Using leverage and paper to keep prices flat. They're going to lose their ass in the paper, but who cares when they're stock-piling physical. Or they may dump the paper shorts during a panic event/phase (see below). Or they'll just change the rules and default on their paper losses. If that is in fact what they're doing, it's unbelievably bullish and makes the case that any non-emergency fund dollars should be used to accumulate metals.
"...Then you take advantage of a major economic disruption when people are having a hard time putting food on the table...You put the squeeze on for several years, buy in low enough volume to keep the price in the basement, but end up buying more than you had in the first place. You're also acquiring land and homes as they default on their mortgages. Then you print money like mad, create inflation to stimulate the economy, let them fear hyperinflation and run up the price of gold to new highs..."
I try very hard not to be conspiratorial, but what you say above is one of the only explanations I can think of for what's happening now. They are in the "juicing" phase. That is, they're desperately reflating assets (real estate, equities, and until recently, bonds). Once they get enough people in these vehicles, the might just veer them straight toward the cliff to create a panic. People liquidate (i.e., sell) everything just to be "safe" and put food on the table, as you say. That creates a huge buying opportunity for those that don't need to worry about rent/mortgage, grocery budget, etc. Then they can gobble up everything they want. That may include metals at first, but keep in mind, they're already doing that now, and I don't think metal prices would stay low for too long. If we crash, the dollar may strengthen, but only for a short time. It will become obvious that only 2 choices remain. Flat out dollar devaluation or outright default. Once that's clear, then boom. Gold soars again.
"...When they're earning again, they'll start buying up those houses again and you can charge astronomical interest rates on the loans to you because of your bad credit because of that foreclosure...
That I'm not sure about. I don't know that people will start buying up houses again, especially at high interest rates. That won't happen. More likely, large cash buyers will gobble up housing and then charge rent. Banks will become landlords on a large scale. This is already happening, in fact.
Long term, this all tells me to keep accumulating and being over-weight hard assets - As long as you have enough cash money to cover emergencies
and to use when crises creates buying opportunities. I guess what I'm saying is that I'm somewhere between Jack and Chris Duane. I'm currently a little too overweight metals. But I think having 30-50% of your "liquid" savings (i.e., non-assets, non-retirement) in metals is a pretty safe sweet spot. I'm not willing to be over-weight cash, because there is a risk their, too. I agree with Jack that the dollar isn't likely to go poof overnight. But if a dollar "event" ever appears likely, it may be hard to time it right.