Debt Limit Is Abolished, What Will Happen to the Price of Gold?
by Bill Sardi: The
Coming Economic Dictatorship
to the price of gold if the US elects to abolish a debt limit?
Atlantic says the debt limit is a dead weight on the reigning
political party. The Atlantic article cites a proposal by Timothy
Geithner, Secretary of the Treasury, to give the President power
to raise the debt ceiling arbitrarily unless over-ridden by a 2/3rds
vote by Congress.
Good God, the
government credit card would be in the hands of a monarch and Congress
would cower at opposing him at the risk of losing votes. If anyone
thought fiscal irresponsibility is rampant today, try tomorrow when
the President can call his own spending (un)limit. This disturbingly
alters the balance of powers outlined in The Constitution.
go along with the idea. Senate Minority Leader Mitch McConnell (R)
suggested in July 2011 to permit
the president to unilaterally raise the debt ceiling unless
Congress affirmatively voted to stop him. And even if Congress did
vote to stop him, the president could veto, and then Congress could
overturn his veto.
But hey, Moodyís,
the credit rating giant, has
warned "If negotiations fail to produce policies that lead
to debt stabilization and ultimately reduction, then we expect to
lower the US credit rating, from Aaa probably to Aa1." That
would move the US credit
rating from "prime" to "high grade." That
means interest rates on debt would have to rise, and America is
carrying $16 trillion of accumulated debt. Moodyís recently stripped
France of its Aaa rating to a Aa1 downgrade.
A recent article
Gold Council to say, that since 2000 increases in the U.S. debt have
been accompanied by increases in the price of gold.
The spot price
for gold is ~$1715/oz. at this current moment. Given the current
political hijinks, a veteran metals analyst says his target
price for gold in 2012 in $1920. Reuters
speculates gold will rise above $2000/oz. in 2013. Other sources
say gold could rise above
$2700/oz. by 2014. Given that second-term Presidents have a
penchant for going overboard on spending, another source predicts
could soar above $3500/oz. by the end of 2013.
have predictably risen to unprecedented heights if documented
manipulation had not occurred.
that untethering the Federal budget from a debt limit wouldnít have
consequences internationally. What foreign country would have any
confidence that the IOUs (US Treasury Notes) they now hold will
ever be paid back?
Japan and China
over $2 trillion of these IOUs. In Senator Tom Coburnís book
DEBT BOMB he predicts a day in 2014 when Japan recognizes it is
holding worthless IOUs and sells
off US Treasury Notes, causing the US dollar to plummet in value.
It sounds like politicians are hastening that day along.
If you decide
to run for the hills when all this occurs, donít forget your gold
mining kit and maybe a sluice
tip: placing a lighted match to your paper money is a good way to
start a campfire. Just think, paper money could be used as kindling
and a renewable source of "green" energy :).
if you use dollars as kindling you are subject to a $100 fine. Title
18, Section 333 of the United States Code says "whoever
mutilates, cuts, disfigures, perforates, unites or cements together,
or does any other thing to any bank bill, draft, note, or other
evidence of debt issued by any national banking association, Federal
Reserve Bank, or Federal Reserve System, with intent to render such
item(s) unfit to be reissued, shall be fined not more than $100
or imprisoned not more than six months, or both." Of course
itís OK for the government to destroy its purchasing power.
But just imagine,
print money endlessly and you could now afford to use US dollars
to play the Monopoly board game in place of the play money :). And
hey, get this, a
nickel currently costs the US Mint 11-cents to make, whereas
the value of the US dollar has shrunk
in purchasing power from $1.00 in 1913 to less than a nickel today!
him mail] is a frequent writer on health and political
topics. His health writings can be found at www.naturalhealthlibrarian.com.
latest book is Downsizing
© 2012 Bill Sardi Word of Knowledge Agency, San Dimas, California.
This article has been written exclusively for www.LewRockwell.com
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