I recall a time in 1980 when I was 15 years old and in high school history class. My teacher at the time told the class that the US debt had surpassed $800 billion. When he said this, I was shocked and aghast. I thought to myself, "how is it possible for the richest country in the world to be so deep in debt?".
37 years later, I think I know the answer... The Vietnam War!
This useless war that cost the lives of some two million Vietnamese and based on the outright lie that we know today as the Gulf of Tonkin incident, essentially bankrupted the USA. The fact that (I am not a crook) Nixon decoupled the dollar from gold in 1971 at the height of the Vietnam War attests to this.
The US Gov (and Military) ran out of money so they used the dollar's status as reserve currency of the world to print up a shit storm of new money created out of thin air to finance the Vietnam War and all subsequent conflicts since 1971. The end result... $21 trillion in debt in year 2018.
The obvious question is... 'how can all this debt that was created out of thin air ever be paid back?'. The answer is, it can never be paid back, plain and simple.
Sadly, the FED is now on a destructive path of raising interest rates just as debt hits new all time highs not just in the USA but also in Canada, Japan, UK, Europe, China and so on. This equates to higher interest payments. We are now seeing trouble in states such as Illinois and New Jersey, specifically their promises regarding their public pensions. It's not looking good for pensioners and those set to retire. Are reductions in pension payouts imminent? My guess is YES! Can you imagine millions of seniors rioting in the streets demanding what they were promised? It's not a far fetched scenario.
Next Wednesday, the FED will hold its FOMC meeting and the consensus is in that they will raise rates again. Expect gold and silver to tank leading up to Wednesday, a pattern that has repeated every time the FED raised rates in the last 2 years. But another pattern that has repeated is the upswing in gold and silver in the days after an interest rate hike. I expect the same to happen next week as we get closer to the FOMC meeting and in the days afterwards.
So if indeed the FED does raise rates next Wednesday, expect gold and silver to move higher. This should also solidify expectations that rates are rising and rising faster than expected. This will be bad for those who owe but will be great for those who hold gold and / or silver as the masses wake up to this fact and start piling into precious metals and the quality mining shares.
See how silver was pushed down yesterday (Friday, March 16, 2018)? This is a precursor to next week's FOMC meeting.
For gold and silver bugs, the summer of 2018 should be a very nice summer indeed. For those who owe money, it's time to focus on paying down your debts or risk the pitfall of higher interest rates.
Looking for a quality gold miner to invest in that started full production at the beginning of February? Check out K92 (KNT.V on the TSX). This company is set to produce 50,000+ ounces of gold this year and also silver, lots of copper and even tungsten! Their shares at closing on Friday = $0.64. Shares have risen about 10 cents just in the last two weeks. Now's an excellent time to get in.
Good luck and stay focused!
