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 Replies: 26 / Views: 3,626 |
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Pillar of the Community
United States
2602 Posts |
This is an interesting article I read today, talking about the US debt ceiling about to be reached May 16th. The debt ceiling has been raised 10 times just since 2001. If the ceiling is reached, many negative repercussions occur, so the ceiling almost certainly will be raised. The effect of this on precious metals, bonds and other aspects of the economy could be enormous! http://money.cnn.com/2011/01/03/new...x.htm?iid=ELEdited by mycrob
04/04/2011 4:32 pm
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Pillar of the Community
United States
3345 Posts |
Yes it could. I wish congress would forget politics and try to act like adults. That would save us all some money.  |
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Pillar of the Community
United States
1348 Posts |
wow I'm goign to start buying more gold for my own portfolio :)
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Moderator
 United States
14463 Posts |
Quote:
posted by rachums107
I wish congress would forget politics and try to act like adults. That would save us all some money. IMHO - those two words don't really go together  |
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Moderator
United States
189053 Posts |
The current forum location prevents most from saying what is really on their mind. That being said, this is a gentle reminder to keep the discussion forum-appropriate. I am moving it to the 'Precious Metals / Bullion - Gold, Silver, Copper, Platinum' forum since that is where the focus should logically be. However, keep in mine that we may have to eventually move it to the 'General Discussion' forum.  |
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Pillar of the Community
 United States
2602 Posts |
Thanks, jbuck, I really wasn't sure where this would best fit, since it impacts precious metals/buillion, but other aspects as well.
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Moderator
United States
189053 Posts |
No problem. This is really just my opinion, but the PM market is driven by news like this and I think the discussion would do well to focus on that. That is, it does not really affect collector value, at least not directly (only in that rising PM value raises common date value). I could be wrong and if proven so I will gladly move it back to the Main Forum.  |
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New Member
United States
33 Posts |
If any business was run the way our country is, it would be out of business in a hurry.
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Valued Member
Canada
442 Posts |
Interesting indeed and thanks for the article. Its going to be some interesting time for those that stack PM's.
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Valued Member
United States
244 Posts |
I admit that my desire is somewhat perverse, but a part of me is hoping that the debt ceiling doesn't get raised, because it's pretty darn clear by now that there is no other mechanism by which this sad excuse for a country will ever learn to spend within its means.
But what would such an outcome say about PM prices? If the response is to cut spending and raise taxes immediately, it will almost certainly be bearish, as the withdrawal of nearly a trillion dollars a year in excess spending should be strongly deflationary.
But what happens if we choose to default? It might depend on what form that default takes. Whatever form, a default would lead to a similar outcome as the first scenario - since no one would want to lend us money anymore, we'd be forced to live within our means regardless of debt ceiling at that point. Again, deflationary. The only question is whether the drop in prices due to the deflationary forces would be offset by a potential rise in prices due to an anti-dollar panic?
There is, of course, a third option not mentioned in the article. Simply print money to cover the obligations. If that happens, metals should absolutely skyrocket.
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Pillar of the Community
United States
3670 Posts |
Historically speaking, there seems to be a natural economic law, that when an empire gets to large, (starts living to far beyond its means), or perhaps expands its borders to far, it implodes on itself. Not a matter if, but when....
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Pillar of the Community
United States
4008 Posts |
Quote:
If any business was run the way our country is, it would be out of business in a hurry. - Dch828 You've got that right for sure. On the other hand, any legit business run like the government would have people landing in jail, left, right, and center! Quote:
Historically speaking, there seems to be a natural economic law, that when an empire gets to large, (starts living to far beyond its means), or perhaps expands its borders to far, it implodes on itself. Not a matter if, but when.... - Silverhawk
Yes, there is that. Empires are usually built upon an assumption of continuous expansion. There is no standing in place for them. They either grow or shrink. Although the USA is not an empire, we do share a number of features with various empires throughout history. We would do well to heed the lessons of history and try to avoid making as many of the mistakes of the past as we can. For sure, there are plenty of new ones we can make! Another lesson from history is that all fiat currencies tend to revert to their inherent value... which is practically zero. Isn't it odd that the people who bring a currency to its knees invariably tend to be those who are trying to help others and do good things? Unfortunately for their efforts, such things tend to quickly get out of hand and spiral completely out of control. Sounding familiar yet? |
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Pillar of the Community
 United States
2448 Posts |
This ought to bring a few "Hoots & Hollers"!  Well, I've been viewing several different forums with the same central theme trying to decide how to contribute to this thread. I know that all Governments need to wean themselves from the non appropriated funds spigot if we are to even dream of balancing the budget; I personally don't believe it prudent to just "turn off the spigot". Point being, it took along time to get here, it'll take a little longer to get back unless we want them to "tax us to wellness". Prior to 1962 many entitlement, program, budgets were fenced and couldn't be touched by hungry politicians or their cronies. That year Johnson "raided" the Social Security "pot" as a temporary, stop gap measure and opened a whole Pandora's box of problems. Congress perceived use of the funds as a panacea for funding many special interests and continued un-fencing formerly untouchable funds. The biggest problem was that the temporary stop-gap measures didn't deter the "Great Society" from increasing its appetite for gobbling up more funds. I think the Railroad Employees were the only ones to successfully keep their retirements fenced and to this day are self sustaining ( I could be wrong). Not only that, today, social security and federal retirement wages are a good percentage of why we have to float loans. They used to be self sustaining, not anymore. Thank you all you great American Politicians; you couldn't wait to get your hands on all that money. (And no I wasn't old enough to vote back then...I couldn't vote until the year I returned from Viet Nam.)(By the way, I hear a lot of folks saying that it was easier to float paper for all those programs because in those years the population was strong and GDP could sustain the interest! Yup that paper was probably written by the same guy that wrote the one that stated it was cheaper to move our manufacturing base out of the country and promote a more global economy. What was it that Ross Perot once said, "that sucking noise you hear is all the jobs going south of the boarder.") I know we all want to point a finger at what the "Government" has done. But guess what; when you point one finger, there's three pointed back at you. Yup we put those jerks in office and voted for them year after year while their special interests "suckled" on the non appropriated "spigot". I guess we were hoping for the trickle down effect to take care of us little guys. I Guess after we pulled our head out of the sand, we finally learned the real problem associated with deficit spending. To bad it took the worst economic down turn since the great depression to get us to wake up. I've decided to hold my precious metal positions until after May 16th. (Oh by the way, if you haven't read, they may have enough to extend the deadline until July, but no longer.) The only thing we can do now is hold on for a wild ride and write our representatives "inspiring" them to put together a realistic budget. While "The Sound and Fury" may make you feel good for a while, it's going to take real work to get our Representatives to start looking out for the country's interests and not their own. I think we may have made a real start after seeing the number of Freshmen in Congress after the last election. In 2012, I believe you'll see a lot more. We have a long way to go. Write your representatives!I apologize for being so verbose.
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Pillar of the Community
Canada
834 Posts |
Good time to buy
you know what they say
"buy on rumours, sell on fact"
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New Member
United States
24 Posts |
I have a bad feeling about this mess.
The economy is heading for the toilet. The silver surge is going to be gaining lots of attention. I'm sure investors are raising money to increase mining operations. I think silver will really move, simply because it is within the means of all investors.
What concerns me the most:
China stopped exporting silver. At some point the profit margin will be so great, they will start exporting again. How can they afford not to? When China does start exporting, they will flood the market. This could be bad for lots of folks getting in late.
With all that being sad, I still buying alittle silver here and there.
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Pillar of the Community
United States
2448 Posts |
After re-reading my rant, I must correct a couple of misstatements. While President Johnson did in fact change the accounting rules for the Social Security fund, it was not until the late 1960s. The budget ceiling was raised for the first time in 1962. It's amazing that, what most fiscal conservative perceive as bad changes to the SS program, re-classification of funding the program, taxation of the benefits, re-classification of accounting procedures, happened during a Democratically controlled Legislative and Executive branches of the government.
This morning, I watched another barrage of words between a Demo and Republican Congressman. With a 14.7 Trillion dollar budget, of which 1.47 Trillion is unfunded (these are approximations), these two "gentlemen" were battling over 31 Billion dollars in cuts to enact a temporary stop gap measure and keep the Government operating after Friday. I was amazed at how each other still point the finger and try and blame the other side. Write your representative! Get it done!
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Replies: 26 / Views: 3,626 |
Posted 04/04/2011 3:58 pm
