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Posted 06/24/2021 4:50 pm
I hear over and over that the US Government has no assets to back up the money they print. I understand that they don't hold the gold and silver to back it up but the US government owns about what, one third or so, of all land in the US including areas with massive amounts of oil, natural gas, minerals, etc. Now maybe some boneheads in the government don't allow it to be "exploited" for political reasons which I won't discuss but as an asset to debt ratio I think the bottom line is they are far in advance on the asset side. Remember Jackson sold off US government land and used the money to completely pay off the debt so the precedent exists, just not the political foresight, or will
Unlike, say, BTC which truly does exist on a wing and a prayer and has no assets of any kind to back it up. Yes if the US government continues on the present course of parachuting money into the economy I do see silver rising dramatically over the next few years, outpacing gold, but at the same time the value of the money that you could sell it for then will be a lot less than the comparable value of the money today.
The bigger problem is the fed has completely tied their hands on inflation. Everyone says when inflation kicks in they can just raise interest rates. But can they? Think it through. On a 30 trillion dollar debt each 1% increase in the interest rate requires another 300 billion dollars in deficit spending to finance it. Going from 0% to the historical average if 5% would require an additional 1,500 billion, or 1.5 trillion, in interest on the debt a year. Can the US government afford a 2 trillion dollar a year debt payment, which it would rapidly approach with the compounding of the debt due to borrowing to make interest payments?
Think of getting a credit card and not only never paying the principle, only the interest, but also charging the interest to the card. At 5% interest the debt doubles every fifteen years and that assumes all other spending is flat, which will never happen. Debt doubled in the last ten years, from 14 trillion to 28 trillion, I expect it to double in the next ten as well
So yes in ten years I see $100 silver but then again a $10 can of coke
Unlike, say, BTC which truly does exist on a wing and a prayer and has no assets of any kind to back it up. Yes if the US government continues on the present course of parachuting money into the economy I do see silver rising dramatically over the next few years, outpacing gold, but at the same time the value of the money that you could sell it for then will be a lot less than the comparable value of the money today.
The bigger problem is the fed has completely tied their hands on inflation. Everyone says when inflation kicks in they can just raise interest rates. But can they? Think it through. On a 30 trillion dollar debt each 1% increase in the interest rate requires another 300 billion dollars in deficit spending to finance it. Going from 0% to the historical average if 5% would require an additional 1,500 billion, or 1.5 trillion, in interest on the debt a year. Can the US government afford a 2 trillion dollar a year debt payment, which it would rapidly approach with the compounding of the debt due to borrowing to make interest payments?
Think of getting a credit card and not only never paying the principle, only the interest, but also charging the interest to the card. At 5% interest the debt doubles every fifteen years and that assumes all other spending is flat, which will never happen. Debt doubled in the last ten years, from 14 trillion to 28 trillion, I expect it to double in the next ten as well
So yes in ten years I see $100 silver but then again a $10 can of coke
Edited by jaxenro
06/24/2021 4:53 pm
06/24/2021 4:53 pm
