I was just checking the numbers myself this morning and they are sobering: the U.S. will soon be borrowing more than its entire economic output.
How long can a nation, even one as powerful as America, owe more than it produces?
At a Senate hearing last week, a Government Accountability Office (GAO) auditor quietly dropped a bombshell about the size of our national debt. Since World War II, the percentage of U.S. debt held to Gross Domestic Product (GDP) has averaged 43%.
But today, it’s a staggering 74%!
Till Debt Do Us Part
As of April 5, 2016, the official debt of the U.S. government was $19.2 trillion.
That’s $59,508 for every person living in the U.S. and $154,407 for every U.S. household.
hellcatThat’s right: that’s as if Uncle Sam bought every single American a brand new, stick shift 2016 Dodge Challenger Hellcat Edition muscle car…the most powerful American production car ever made… on a credit card.
Unchecked government spending is driving our great American muscle car economy straight into a ditch.
The Congressional Budget Office (CBO), the Brookings Institution and the Princeton University Press have all warned of the potential consequences of unbridled national debt:
Significant investment losses
Reduction in income and living standards
Higher marginal tax rates
Higher inflation
Fiscal policy restrictions that cripple responses to unexpected events
A crisis in investor confidence that leads to more borrowing
Budget analysts have been warning for some time that future budget projections by the U.S. government fail to account properly for rising health care costs (remember Obamacare?).
These could actually drive the percentage of U.S. debt held to GDP into the 200% or even 300% range… wow.
Central Banks Buy Gold in Preparation for Economic Uncertainty
Gold prices ended last week higher as the Federal Reserve remains cautious about future interest-rate hikes.
Author and financial analyst Jim Rickards notes that many central banks are acquiring gold in preparation for a global monetary reset. In fact, since 2010, central banks have been net buyers of gold. This demand has expanded rapidly, growing from 2% of total world demand in 2010 to 14% in 2014.
In light of these sobering GAO audit findings and central bank developments, isn’t it time for you to think out of the box and diversify some of your portfolio with assets not tied to unchecked national debt and questionable U.S. government accounting practices?
LEARN MORE AND TAKE CONTROL
In times like these, having a little gold or silver in the home safe is of considerable comfort to anyone, regardless of your exact view of the markets ahead, your political leanings or even your age.
