Debt & Deficits

You have been warned! The financial world is descending into the trap of exponentially increasing debt that leads, slowly or rapidly, toward an abyss of monetary madness that can only mean much higher gold and silver prices in the future.

The value of a currency is determined by a number of variables. In this article, I will focus on the dynamics of demand, supply, current account deficits, and aggregate government debt.

The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up.

Warning lights are flashing. Whether it’s this year or next year, the odds of another economic downturn are high — and growing.

Central banking makes it possible for the government to expand the money supply by any amount, at any time deemed necessary and once (hyper)inflation is publicly seen as being the lesser evil of all options available for the government meeting its debt service, it cannot be dismissed out of hand that (hyper)inflation would be the consequence of an unsustainable debt-to-GDP ratio.

This short video - on the sustainability of government spending - should be watched by everyone, including those not yet old enough to vote. It should be shown in every high school and college classroom.

The term “derivative” has become a dirty, if not evil word. So much of what ails our global financial system has been laid-at-the-feet of this misunderstood, mischaracterized term – derivatives. The purpose of this paper is to outline the origin, growth and ultimately the corruption of the derivatives market – and explain how something originally designed to provide economic utility has morphed into a tool of abusive, manipulative economic tyranny. Words: 3355

the U.S. national debt is not a problem, says Gary Shilling, until we either see "a tremendous amount of inflation or a complete breakdown in confidence in US Treasury obligations." Once that happens, the world's largest economy is at risk of an exploding 'debt bomb.'

The history of financial crises and the relationship between growth and public liabilities shows that burdens above 90% are associated with 1% lower median growth - and the United States’ debt level is currently hovering around 90% on a gross basis and 60% netting out assets.

The rising gold price is a warning signal for the coming economic crisis.