The U.S. National Debt is a “train-wreck.” The official debt is
nearly $20 trillion and the unfunded liabilities are $100 – $200
trillion, depending on who is counting.
- It can never be repaid. Implications are dire.
- Official debt doubles about every 8 years. Does $80 trillion of official debt in the early 2030s sound viable?
- Per Krugman there is no problem. Consider the source.
- Denial is not a winning strategy, but it does prolong the period before the crash.
- The losers in the crash will probably not be the financial or political elite. That leaves the rest of us.
This graph shows the US official national debt – log scale in
$millions – for a century. There is ample reason to believe this 100
year trend will continue and possibly accelerate.
However you might say, “But the population increased several times in
the last century.” The graph below shows the official debt per person –
the population adjusted national debt.
Debt increased exponentially in both nominal dollars and adjusted for population.
You might say, “Yes, but central bank created inflation has increased
the total debt.” The graph below shows the population adjusted debt
priced in real money – silver.
(Gold graph has a similar form but is not shown.)
As the graph shows, population adjusted national debt has
exponentially increased even when measured in silver. Note that this
graph used a 10 year moving average to smooth the price data.
WHAT ABOUT SILVER, GOLD, AND CRUDE OIL?
The graph below shows smoothed (10 year moving average) silver
and crude prices. Gold price patterns are similar to silver prices and
are not shown. Note that silver and crude prices increased erratically
but exponentially.
Silver prices are currently low based on their 20 year “megaphone” pattern. Expect much higher prices.
CONSIDER:
- Debt has increased exponentially for over 100 years. Debt will continue to increase.
- The US economy is not robust. A recession/crash is coming which will
reduce tax revenues while increasing borrowing and spending because
politicians will “stimulate” the economy with projects, “helicopter
money,” a guaranteed income, more “giveaways,” and probably many more.
- War cycles (Edelson and Armstrong) indicate increasing
warfare in the next five years. Wars are currently expensive and the new
ones will be worse. More spending, more debt …
- Baby boomers are retiring. Their Social Security and Medicare
benefits are costly and accelerating rapidly. More debt and more
spending…
The list goes on, but the prognosis is more debt, more spending,
higher prices for what we need, and an acceleration of debt creation
into the crash or reset. What happens after a crash or reset is less
clear.
Silver and gold prices erratically increase along with debt. Given
that silver prices are near the low end of their 20 year “megaphone”
pattern, expect much higher silver prices. Further, the cost of
production is increasing rapidly and the ore quality is declining.
Expect prices to increase based on limited supply.
Given the precariousness of the central bankers’ fiat currency Ponzi
Schemes and the coming realizations about the intrinsic value of paper
investments and debt instruments, silver and gold prices should move
much higher in the next five years due to heavy demand.
ALTERNATE CONSIDERATION:
From Paul Krugman, PhD and Nobel Prize Winning Economist:
“… there’s a reasonable argument to be made that part of what
ails the world economy right now is that governments aren’t deep enough
in debt.”
He might be right, 33,000 “missing” emails might concern yoga pants
and weddings, the military buildup in the middle-east is merely for
show, massive debt helps the average person, you can keep your doctor,
Obamacare will save you money, he did not have sexual relations with
that woman, hope and change have been a resounding success, Santa’s
elves are making really cool toys for Christmas, a single F-35 helmet
that costs $400,000 is a bargain, and herds of Easter Bunnies are
bringing “nest eggs” for everyone who earns less than $100k per year.
Yes, he might be right…
But if the above ideas don’t fit your basic beliefs, silver
and gold should be far more successful than investments in unpayable
debt, paper currencies, and levitated stock and bond markets.
|
GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 - 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.
|
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
