Friday, May 29, 2009

US Government Debt and Gold

The history making growth rate and amount of US government debt assures a higher US dollar price of gold and silver, including virtually all other government fiat token prices.

The US has to borrow almost $3 billion dollars a day to maintain its standard of living. And, it doesn't create amounts of real wealth anywhere near like it used to. To pay off the debt, or seriously reduce it, it would have to be creating real wealth at a faster pace than it is borrowing it. That is simply not possible for a huge number of reasons.

All that new debt being created represents an equal amount of new dollars being created and going into the financial system.

It would make sense to have expected central banks around the world to have backed off substantially from buying US dollar denominated debt. Basically, that has not happened in any way that makes a difference.

Probably, central bankers around the world fear that if they did start to back off buying, that that would collapse the world's financial system. Since 1971, they are all playing the same game and know that they have to support each other to varying extents.

They can only keep this scam going for so long. Not for ever. No financial system/economy can take on unlimited amounts of debt. The powers that be do not care if their actions end up causing the implosion of the US economy/country or most any of the other economies. The powers that be are short term oriented. Power players are like that.

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage." -- John Kenneth Galbraith

Gold and silver are the most powerful protectors from economy and country implosions (shake, rattle and roll), but not if you are a last minute buyer.

Most in the English speaking world did not learn didly squat from the implosion of the huge USSR. The new puppet in the White House is continuing the concentration of the power of central command of the US economy by the federal government just like the last puppet did.

If the "Land of the Free" is now more communistic and fascist than not, what does that say about the future of their fiat token? The dominant philosophy determines the future.

At some point, gold and silver will not be easily available, never mind a much higher price. The picture of those trying to get some later rather than sooner could get interesting/entertaining.

1 comment:

Anonymous said...

Great Blog Article; you are 100% correct. Funny Pic too.