Thursday, August 4, 2011
"The Gold Rush"
Several months ago I wrote a blog entitled "How To Survive The Coming Financial Collapse". Gold was going for $1200 dollars per ounce. I recommended you consider buying gold as a hedge against the depreciated dollars being printed like monopoly money by the U.S. treasury.
Today, gold is going for nearly $1700 dollars per ounce as the world economies are under tremendous pressure from the economic collapses in Greece, Spain, Ireland, Great Britain, Italy and the United States...yes, you read that right; the U.S. is poised to enter a period of massive economic upheaval. Our creditors have finally had enough. Yesterday, China (Communist China, for God's Sake!) downgraded our debt and placed a credit watch on us.
Let's put this in proper context. The neutral Congressional Budget Office has tabbed American debt as follows:
Current debt: $14.5 trillion dollars
Long Term Debt (Unfunded liabilities): Social Security and Medicare, etc: $74 trillion dollars
Total debt: $88.5 trillion dollars.
Since the U.S. government takes in $2.2 trillion dollars in taxes and other revenue, if we stopped paying everyone..and I mean everyone, to include old folks, vets, government employees, the poor and every other bill, it would take us half a century to pay down our collective debt!
I now encourage you to google "debt reduction through deflated dollars".
And I quote from the U.S. Government Accounting Office:
"Based on the 2010 U.S. budget, total national debt will nearly double in dollar terms between 2008 and 2015 and will grow to nearly 100% of GDP, versus a level of approximately 80% in early 2009. Multiple government sources including the current and previous presidents, the GAO, Treasury Department, and CBO have said the U.S. is on an unsustainable fiscal path. As the debt ratio increases, the exchange value of the dollar may fall. Paying back debt with cheaper currency could cause investors (including other governments) to demand higher interest rates if they anticipate further dollar depreciation. Paying higher interest rates could slow domestic U.S. growth."
Focus especially on "100 percent of GDP...by 2015".
Bottom line is this: A financial Hurricane is approaching that is going to have severe consequences to your family's financial survival. We can reduce the severity if we demand financial reforms from our legislators and take every possible measure to expand our economy; scrap "cap and trade" rules on energy programs, take away business uncertainty by killing the Dodd-Frank financial regulation legislation, kill Obama care and reward businesses who create jobs.
Meantime, hang on to that little gold pinky ring and grandma's necklace and sally's 10k school ring. Those greenbacks in your wallet are just funny money and will soon be worthy alot less.