LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Ignoring Economic Reality: Ayn Rand Would Laugh


 -- Published: Wednesday, 30 May 2018 | Print  | Disqus 

“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” Ayn Rand.

The western world has ignored economic realities for decades. It’s not a Republican or Democratic problem. Banking, power, fiat currencies, dishonest money and transfers of wealth are the issues.

The consequences of ignoring reality are uncomfortable and dangerous. However, most people prefer palatable, easy to digest and believable stories.

In the United States, the U.K., Europe, and Japan it is comforting to believe:

  • Debt has increased exponentially for decades and for over 100 years in the US. We want to believe debt will grow for another century. (It won’t.)
  • Governments want to borrow, spend their way into prosperity, and pretend and extend indefinitely. (Not likely.)
  • It is comforting to believe our politicians and central bankers manage our countries and currencies for the benefit of the populace. (Don’t plan on it.)
  • Every major country uses a central bank. It is comforting to believe central banks are necessary. That delusion benefits the banking cartel and the political and financial elite.
  • It is comforting to believe gold is not necessary. Per Warren Buffett, we dig it from the ground and store it in a vault. Russians and Asians know its value and always want more.
  • It is comforting to believe in paper assets, debt based assets, fairy tales and the Easter Bunny. Gold, silver, platinum, land, and other real assets survive. Gold thrives, paper dies.

These comforting beliefs are incorrect and will be proven false in coming years.

The U.S. national debt has increased from about $3 billion in 1913 to over $21,000 billion ($21 trillion) in 2018. That is an average annual increase of about 8.8% per year. A similar debt increase for another 100 years will exceed $90,000 Trillion. Delusion!

  1. The crisis of 2008 hinted that “peak debt” had arrived. The Fed and other central banks responded by creating more debt and took credit for saving global economies. More debt is not a solution. The coming implosion will be destructive.
  2. Place one penny in a savings account at 6% annual interest and allow it to grow for 1,000 years. Your $0.01 has grown to a few hundred bucks—right? No! It has grown to $202,000,000,000,000,000,000,000. (Yes, the math is correct.)
  3. Compound interest rapidly increases debt. Debt will not increase forever and a reckoning will occur. What is the value of a 30 year bond yielding 3%, issued by an insolvent government that cannot pay the interest without going deeper into debt?

CONSIDER:

  • Central Banks: Central banks and commercial banks produce paper and digital currency units that devalue all existing currency units. Central banks create profit for their owners and the financial and political elite. They are not beneficial for most people and small businesses.
  • Gold: The western financial and political elite claim gold is mostly useless. However gold has been money for thousands of years, is valued globally, and is convertible into paper and digital cash everywhere. An ounce of gold sold for about $42 in 1971 and sells for about $1,330 in March 2018 – a compounded annual increase of 7.6%.
  • Debt: The debt pyramid will crash and bonds and currencies will decline toward intrinsic value. Central banks will create more currency units to “paper over” the crisis and gold will increase in price as dollars devalue.

Ignoring Reality and the Consequences:

“We can ignore reality but we cannot ignore the consequences of ignoring reality.” The consequences are:

  • U.S. government spending and national debt growth are “out-of-control.” Expect continual dollar devaluation.
  • Based on Fed policies and government actions, the Fed can save either the dollar’s purchasing power or the bond market. Pick one!
  • Because an imploding bond market will destroy credit and the economy, expect the Fed to sacrifice the dollar, not the bond market.
  • However, the Fed and the U.S. government may kill all three – the stock market, bond market and dollar – in their delusional efforts to project military power and protect the banking cartel.
  • Gold and silver prices must increase as all fiat currencies devalue. Another country might back their currency with gold to prevent further devaluation. It won’t be the United States.
  • The cumulative damage from past economic delusions increases gold prices. The western financial world should be worried. Trouble, trauma, and a reckoning lie ahead.
  • Confidence in the dollar affects gold prices. When the dollar plummets, gold prices at $3,000, $5,000 and $10,000 will be sensible.

Which will have more purchasing power in ten years?

  • An ounce of gold or 14 one-hundred dollar bills?
  • An ounce of silver or a politician’s promise?
  • A ten year note for $10,000 purchased in 2018 that yields less than 3%, or 7 ounces of gold?

Call Miles Franklin at 1-800-822-8080 or WhyNotGold at 1-888-966-8465 to purchase real metals that will survive the coming debt-based asset implosion. History will not repeat, but many examples show that the purchasing power of gold will thrive while unbacked paper currencies will not.

Gary Christenson, The Deviant Investor


| Digg This Article
 -- Published: Wednesday, 30 May 2018 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.