By Sean Kelly
We are posting this commentary on Election Day.
And while we have definite views about the election’s results and its aftermath, we are not pollsters or psychics.
We think our real job is much more important. It is to help our friends and clients secure their retirements, protect their wealth, and profit from the prevailing financial conditions.
So, we will confine ourselves today to what is already baked into the cake, higher gold prices. This gives us a chance to follow up on our recent post What Happens to Gold if “You Know Who” Wins the Election?
The laws of economics have often been described as “pitiless,” which is simply a way of saying that no matter who violates them, or when they are ignored, they will still exact their cost. So today we want to review for you where we are, and what will have to be reckoned with no matter who sits in the White House or controls Congress in 2021.
Let us start with US debt.
As we detailed recently, it is now more than $27 trillion dollars. But that is only part of the story.
Like an iceberg, nine-tenths of the US debt is hidden beneath the waterline. So, when the debt is discussed, seldom and reluctantly, by politicians, it is only this visible portion of the debt, $27 trillion, that is addressed.
But that is only one-tenth of the government’s obligations!
More than $200 trillion of additional debt is hidden by government accounting. These debts are very real and vital to the survival of millions of Americans. They include things like Social Security, Medicare, and Medicaid. They are called “unfunded liabilities” because the government has incurred the obligations to pay them but has not provided the means to do so.
As we have detailed, Lawrence Kotlikoff, economics professor at Boston University and former member of the Council of Economic Advisors, warns that the hidden part of the “debtberg” is an additional $239 trillion.
That is more than $100 trillion dollars greater than the entire annual productivity of all the people in all the economies in the world! No wonder it is unpayable.
The debt is baked into the cake. It does not go away; it only gets larger.
The President and the 117th United States Congress will have to confront this debt in in January. They will turn to the Federal Reserve to solve the problem.
But having already printed $3 trillion this year, as we wrote last week HERE, the Fed is about at the end of its rope.
Bill Dudley, former president of the Federal Reserve Bank of New York, admitted as much last week on Bloomberg TV:
“No central bank wants to admit that it’s out of firepower. Unfortunately, the US Federal Reserve is very near that point. This means America’s future prosperity depends more than ever on the government’s spending plans — something the president and Congress must recognize.”
The president and the Congress will look to the Fed. The Fed will look to the president and Congress.
The reality is that neither can do anything about it other than try to paper things over with printing press money for just a little while longer.
Because the laws of economics are pitiless, it will make the dollar lose value fast.
It will make precious metals go higher. It is already baked into the cake.
Speak with us today about protecting your family and your future with higher gold prices.