Tag: debt crisis
In one hand we hold gold, which is eternal, beautiful, and valuable everywhere. In the other hand we are stuck with a debt sandwich. That sandwich is a massive slab of debt wedged between an impressive military war machine that spends money like water flowing over Niagara, and a huge welfare system that spends money even more rapidly. Included in the welfare system are Social Security pensions, Disability Income, Medicare, Medicaid, SNAP (food stamps), many more programs, and the salaries, bureaucracy and pensions to support them. You can’t eat gold, but you can’t eat a debt sandwich either. If you choose gold, it is recognized and valued globally and can […]
The powers-that-be want confidence in the unbacked paper dollar, not in gold. It should be no surprise that gold went down after its huge rally into 2011 while the dollar, S&P and bonds have gone up since 2011. But all unreal valuations must eventually end. Anyone not in the top 0.1% does not know the timing, but we can be assured that warfare, welfare, debt, spending, and gold prices will rise while stocks and bonds correct.
Debt overwhelms most people in debt based fiat currency economies. Credit cards, auto loans, student loans, mortgages, and more … Debt overwhelms most governments in debt based fiat currency economies. They are in debt because governments spend more than their revenues, which is a truly simple concept. However, don’t expect fiscal sanity to return anytime soon.
Our debt based monetary system requires ever increasing debt, inflation, and expansion. Think about the implications of $400,000 helmets and $85 Billion per month in QE. The continued devaluation of all fiat currencies is a given, based on debt, government spending and central bank policies. Hence silver and gold prices will rise substantially in upcoming years, partially because people want and need it, and mostly because fiat paper currencies are devaluing every day.
Moving into physical gold requires the correct mindset, and the appropriate big picture vision. Investors and individuals should hold physical metals in a safe haven place like Switzerland for the right reasons, not as a trade for instance. And the safe haven appeal of Switzerland is still very much intact. For instance, the U.S. government or IRA cannot approach Global Gold directly. Only in case of a serious case, they can submit the suspicious activity to the Swiss government system, which then will assess whether it is an issue according to Swiss law, and only then can question the gold sitting in a private vault.
Since President Obama’s inauguration in 2009, the federal debt held by the public has soared by 107%, according to recent data published by the Treasury Department. In raw dollars, Obama and his allies in Congress have burdened families with an additional $6.7 trillion in debt. That’s equivalent to more than $57,000 per household. Now the Obama administration is hoping to extract one last debt deal out of the retiring GOP Speaker.
These days, most investors seem unconcerned about the unsustainable levels of global debt and the inflationary potential of the trillions of dollars created by the major central banks especially the U.S Federal Reserve. And, few seem the least bit worried about what a zero interest rate policy (ZIRP) or even a negative interest rate policy (NIRP) will ultimately do to the purchasing power of the dollar.With slow global economic growth, ZIRP and NIRP, expansionary monetary policies of the major central banks as well as exploding debt levels, the future of our current financial system looks very precarious. Despite all of the disparaging talk about precious metals, I believe that the current low levels offer spectacular value.
Assuming the debt ceiling is eventually raised, the move will make the coming debt reckoning that much bigger. Officially, the national debt now comes in at $18.1 trillion – about equal to the nation’s total economic output for a year. Adding in all projected unfunded liabilities brings the total to about $210 trillion, as calculated by economist Lawrence Kotlikoff.
The world has added approximately $60 Trillion in debt since 2007, much of it sovereign debt created from deficit spending on social programs, wars, and much more. In that time the world has mined perhaps 30,000 tons of gold, or about 950 million ounces, worth at September 2015 prices a little more than a $Trillion. It is easy to create debt. Debt increases, currency in circulation increases, and until it crashes, life is good for the financial and political elite. But debt increasing 60 times more rapidly than gold indicates that debt is growing too rapidly and due for a reset.
Gold prices could (I doubt it) fall further in the short term, since High Frequency Trading dominates trading action, and central banks need to hide the fact that their policies and currencies are failing, which usually means they suppress gold prices. Gold was formerly the “canary in the coal mine” indicating the failure of monetary and fiscal policies. But active suppression of gold prices has replaced the “canary” with a plastic look-alike that disguises the warning signal which tells us that something is very wrong with our monetary policies.
We started with the statement ‘simply print more Fiat currency, and you inflate away the debt’… and the first part ‘simply print more Fiat currency’ fails the Trinity of Truth test. Under our current system it’s impossible to ‘simply print more Fiat currency’. How about the rest? Can we ‘inflate away the debt’? Well, if each new Dollar created is of necessity accompanied by a newly created Dollars’ worth of debt, this does not seem likely, does it? Any effort to ‘print away’ existing debt will result in ever larger debt. This is the road to bankruptcy.
The price for gold and silver is being artificially and purposefully suppressed by central bankers. The Western world is falling apart at the fiat financial seams, and those in control will resort to whatever means necessary to remain in control, evidenced by the unending proxy wars and Middle East disruptions started by the US. A Third World War cannot be taken out of the equation as the bankers are scrambling for their greedy lives, stealing as much wealth from people as possible.
I have mentioned countless times that the world is drowning in debt and the implications of this are obvious. We are either going to experience a debt deflation driven depression or we will experience a complete collapse of the current currency system, and some form of hyperinflation. People have been buying gold and silver to protect their wealth from monetary crisis for thousands of years. It’s the only way to keep your wealth safe when banks close, stock markets crash, and the government won’t let you touch your own money.