Debt Denial (You'd Better Be Sitting Down Before You Read This)

The Daily Caller ^ | April 9, 2010 | James Rickards

[Lazamataz]

Will not fight who?

Who will not fight hoo hoo.

Who?

[Theodore R.]

Yes, and the people of Detroit are among the nation’s most easily fooled.

[bert]

This all omits the solution, the old reliable solution taught for eons in Being King 101. When the debt gets too big, inflate the money. The power of compound inflation is remarkable.

By the rule of 72, at a rate of 7% inflation, today’s debt is gone in 10 years. At 10% in 7 years, at 12% in 6 years.

If gold is the benchmark at a controlled rate of 10% inflation, the gold price will be $2200 by 2017, or $2,200 by 2016 at 12%

The catch is control. At 20% gold will be at $2,200 in 2013.

They planners have a predetermined tolerable planned rate. That is secret and will not be revealed

[bert]

......“Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price......

That is the crux of the matter and bears repeating.

“Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.

“Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.

“Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.

[garbanzo]

But you will run out of stuff like wood and you need to exchange something for something to get new stuff, unless you want to live as something just above subsistence farmer or a hunter-gatherer lifestyle. Gold is useful as a medium of exchange for a wide variety of reasons.

[garbanzo]

“US dollars” assumes that there exists a political entity called “The United States of America” that effectively backs up the value of said dollar. There is no reason to believe that will always be the case. For example, why isn’t there much trade in things like CSA dollars? How much trade today is done in things like French Francs?

[Huebolt]

...doesn't have to accept dollars?

So someday the checkout at Krogers will have a little scale measuring gold dust according to the current rate? Yeah, maybe.

The HUGE problem of the gold standard is: There is only so much gold. It's like a six year old child only has a certain amount of blood. And will never get any more regardless of how much they grow. Economies would die instantly on the gold standard. It would, however, prevent inflation - and there certainly will never be a "gold bubble".

Do remember that it was a FEDERAL CRIME for Americans to own gold. Obama would do that in a heartbeat. Already plans for it, I'd bet. Has precedent, after all...Take it away at the point of a gun. Get caught with it and go to jail. Resistance is futile. CommieMedia show trials and all. Sounds like a plan.

[JasonC]

There does exist a political entity called "the United States of America", and it is the most powerful state on the planet. It also has the wealthiest citizens and the most dynamic economy, the highest technology and the greatest scientific knowledge. On the planet, and in history. And your hysteria over one lost election and one recession is too pathetic to merit extended commentary.

Will that always exist? No, but then neither will mankind...

[Painesright]

It is hard to say when, if ever, it will happen.

Hopefully it will never happen, but as we know, with Obummer all (dumb) things are possible.

They have been itching to do it for years. The deficit is just the excuse they need in order to justify it.

It will probably be one of those things that they tuck inside a much bigger bill... like they did with the student loan industry takeover stuffed inside the health care bill.

All I can say is talk to a professional about it. If that professional is not aware that this has been proposed and is being given serious consideration, then they need to bring themselves up to speed on it very quickly.

Good for you that you have savings! I wish you the best in being able to protect and preserve it. :)

[garbanzo]

And your hysteria over one lost election and one recession is too pathetic to merit extended commentary.

Exactly who are you responding to here? I'm not exactly sure where you gathered that from my previous remarks. Just pointing out that a loss of confidence in the dollar or simply a collapse of the political entity backing it is not off the table. If you study history, huge debt burdens relative to productivity have killed powerful empires in the past and will continue to do so in the future. We are not exempt from the laws of history.

[aquila48]

Something is very odd about these graphs. If they are right the PIIGS have the best prospects!!

[Freedom4US]

So someday the checkout at Krogers will have a little scale..."

No, not saying that at all. The point is, that a merchant is free to set the terms of sale, not the buyer. Has nothing to do with gold dust or anything else.

Yes, it was a federal crime to own gold, when gold was money. Wasn't that nice of the government? Now, it isn't, and it isn't. Does that all make sense now? If the government tries to outlaw gold now, it would be more of a disaster then it already is, if that's possible. So, you're probably right.

[Rutles4Ever]

The modern capitalist world is rich and will remain so, is not built on sand, and a gold bug telling you otherwise is no more plausible than a communist telling you otherwise. They've all been predicting the immediate demise of capitalism for as long as there has been capitalism and they are all idiots.

Seriously. Did you post that with a straight face? Capitalism doesn't punish people who create jobs by taxing them into insolvency. You must think it's 1986.

A capitalist system half owned by the central government is defined as something else. As someone who works on Wall Street, I can assure you that venture capitalism is on life support. Without seeders, the circuit comes to an abrupt halt at 1600 Pennsylvania Avenue.

The buying and selling of private real estate has gone out of private banks and into the federal government. You think Geithner/Obama are going to let the commercial real estate market go up and smoke, too? Hell no. They're going to own that, too. If the private sector can't even buy and sell real estate without government permission (i.e., selling back the mortgage securities, which, by the way, no one wants to buy back), it's impossible to call this trash heap capitalism.

[PA Engineer]

There are 4 “B”s to adequate preparation. Beans, Bullets, Bandaids and Bullion. If you are missing any of these then contemplate if you are truly prepared for the upheaval that is coming.

[JasonC]

I'm responded to the idiot who insinuated that the United States is going to disappear. Who are you pretending said that? It is hysteria, by the textbook.

It isn't going to. You'll be worm food, then worm leavings, for centuries, first.

[JasonC]

The US is a capitalist country. I buy and sell real estate myself. I also invest, work, earn, and prosper. And your brain cracked over one weak pol after one lost election. The left are weak and they are toast in November. Meanwhile the economy is already recovering. And all the doom screeching on earth won't make it the end of the world. It just makes you a hoarse fool.

[okie01]

But, when the fan becomes soiled gold can’t be eaten, worn or used to heat your house.

Well, you can always burn paper. Even wear it, I suppose.

Eating it would be problematic.

[garbanzo]

Well the United States will disappear at some point. Probably not tomorrow, but your psychotic jingoism aside, unsustainable public debt has never boded well for the political stability of any nation in history. But I’m guessing you think the director of the CBO is anti-American idiot for pointing out the unsustainability of our current debt situation.

[April Lexington]

Would these be the same Gen X and Gen Y who voted en mass for The One???

[April Lexington]

A further reality is that debt service is not a loss but about the most justified government expenditure imaginable, right up there with national defense, and practically everything else governments do is less defensible.

I'm not sure this is true. The world is teetering on the brink of massive default because the bond houses sold this crap to every government on Earth. If one borrows, its brilliant. If everyone borrows it's not... Look at California, many other states, Greece, etc... all in way above sustainable cash flow levels. All threatening to default and all a burden to future growth. Too much debt is NOT a justified government expenditure any more than drinking 10 bottles of a good 1986 Cabernet in any one sitting is a good idea. There is TOO MUCH debt in the system and it is possible to destroy the system with too much debt. Watch Greece and others who have defaulted...