The staggering debt levels in the U.S. economy can only be resolved by two options: Default or Hyperinflation. Either way, I believe those who have positioned themselves with physical assets will weather the coming economic storm. Both options will create economic pain. I tend toward the hyperinflation option, based on the current and past attitudes of those in power. Hyperinflation allows you to “legally” pay your debts off. Those in power like to hide behind existing laws and use the law as their justification for their actions. They use the “letter” of the law rather than the “intent” of the law to further their own agendas. This is the classic case of self-interest at an extreme.
When there is a disconnect between authority and responsibility, problems arise. Those in authority have no resulting responsibility for their actions. Why? The populace is not in one accord thus there is no unanimous voice to say “No” to the irresponsible decisions of the few. The two party system is designed to divide the people, each group looking at the weaknesses of the other group as its justification for existence.
The largest bank in the United States will stop making student loans in a few weeks. (See:http://www.cnbc.com/id/101012270) JP Morgan Chase has notified schools that it is exiting the student loan market in a few weeks. This should tell you that this bubble is getting ready to burst. With over $1 Trillion in student loans, American households are teetering on default if interest rates rise. This is why the Fed cannot and will not taper their $85 Billion per month of money printing. This continued money printing will serve as a basis of a greater inflationary period to come. At some point, gold and silver prices will sustain upward moves to new levels. Remember when gold was $275 per ounce and silver was $5 to $6?
The recent lack of resolving the debt ceiling tells us that the politicians have no stomach for doing the right thing. Some now believe we don’t even need a debt ceiling. Too bad we as individuals can’t have an unlimited checkbook to feed our egos. Where am I gonna park my yacht?
What is the solution to our problem? Unity among the people. How can that be attained? By everyone getting the revelation of Love. Until then, we are destined for pain.