While the two political parties are slugging it out for the White House, the National Debt continues to climb. Over the course of the last 6 years I have shared the economic realities facing America as well as the globe. Peak Oil is still here though horizontal drilling has taken the focus away from the big issue of oil reserves. Sure, you can extract more oil and gas faster but that doesn’t change the amount in the ground.
The economy is still not growing. Every dollar of additional debt is only yielding about 4 cents of GDP (Gross Domestic Product). What a poor investment! No private company would ever consider that investment. Inflation is busy robbing the savers of the hard-earned wealth. It won’t be long before they say “Remember when hamburgers were only five dollars?”.
The barometer of value is gold. It’s not that gold is increasing in value, the currencies are decreasing in value relative to gold. Gold cannot be manipulated over the long haul although central bankers would love to be able to do that very thing. Those of us who bough quality gold and silver stocks this summer are now being rewarded for our patience and courage to not sell when we saw our purchases dip lower.
There is much rhetoric among both candidates about reducing the debt, that is the “official” debt. I am more concerned about the unofficial debt that is conveniently missing from the $16 Trillion number. As reported recently, the overall unfunded liability of the U.S. is calculated at $222 Trillion. Watch out below!
I have no particular love affair with gold or silver. However Our Heavenly Father established the two metals’ value in Scripture. If it is good enough for HIM, it is good enough for me as well. Each generation of economic thinkers suggest an alternative to the gold standard. Each and every time in the past when the gold standard was removed, the same thing resulted- failure of fiat currencies. Why do we think this time will be any different?
As I can afford it, I continue to buy hard asset stocks and/or metal. I must keep enough cash on hand to handle expenses and unexpected events. At some point gold and silver will go parabolic in price. At that time it may be wise to convert to other assets. Until then, I will hold my positions and accumulate on price dips.
See: http://www.businessinsider.com/citi-2500-gold-six-months-2012-9#ixzz25jNMcMyf
Bill Gross of PIMCO likes the gold investment as well. See: http://bloom.bg/OPEmbE
What happens after six months? One technical analyst see gold at roughly $32,000 by 2016. If hyperinflation occurs, the relative value of the U.S. Dollar could produce the exponential graph shown in this link. See: http://www.sharelynx.com/chartstemp/GoldeWave.php