Saturday , 18 November 2017


U.S. On An Unsustainable Path That Guarantees An Eventual Catastrophic Financial Melt-down – Here’s How to Get Prepared

Although our supposed leaders are presumably highly intelligent, educated, and knowledgeable, they act largely “brain-dead” as they lead the United States down an unsustainable path that guarantees eventual catastrophic financial destruction. Do you own enough gold and silver that you would feel safe in a such a financial melt-down? If not, why not? Words: 817

So says GE Christenson, aka the Deviant Investor (www.DeviantInvestor.com) in edited excerpts from his original article* entitled Back to Basics: A Planned Crisis?.

[Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), may have further edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.]

Christenson goes on to say, in part:

Here are the facts:

1. The US government spends $1 – $2 Trillion more each year than it collects in revenues, using strictly cash accounting. This is not sustainable. The deficit is actually far worse when accrued liabilities are included – as calculated by Laurence Kotlikoff….The fiscal gap (present value difference between projected future spending and revenue) increased about $11 Trillion last year to $222 Trillion (using Kotlikoff’s numbers) because the projected future liabilities dramatically increased compared to projected future revenues. The fiscal dilemma of the US Government is actually far worse than the official budget deficit. Clearly something must drastically change.

2. The US National Debt (official cash accounting) increases about 12% per year (last five years) while the GPD (Gross Domestic Product) is hardly changing, or decreasing, if inflation were properly calculated.

3. Current US government expenses for entitlements (Social Security, Medicare, Medicaid, Military Pensions, etc.) plus current expenses for interest on the National Debt exceed current revenues. The government would still go into debt every year, even if it cut 100% of military expenses and 100% of the remaining US government bureaucracy.

4. The Federal Reserve creates $85,000,000,000 per month of new currency from “thin air” and uses that new digital currency to bail out “Too Big To Fail” (TBTF) banks. The famous “Bernanke Helicopter Drop” is dumping billions into the politically connected banks but little onto “main street” USA. In simple terms, the wealthy are bailed out, the poor are given food stamps and welfare, and the middle class pays via taxes and inflationary confiscation of their savings and pensions.

All of the above are signs of financial desperation resulting from unsustainable policies….

Follow this logical thought process: Washington D.C. and Wall Street are filled with highly intelligent people who know that:

  • Unbacked paper money always declines in value to near zero.
  • The government cannot tax businesses and individuals into wealth and prosperity.
  • The government cannot create wealth, prosperity and employment by printing money – debt monetization – QE4-Ever – Inflate or Die.
  • Deficits DO matter.
  • Massive money printing will NOT help the economy long-term, but it WILL CREATE inflation in consumer prices.
  • We cannot get something for nothing.
  • Unsustainable fiscal policies will eventually collapse or fail.

However, our “leaders” in Washington D.C. and on Wall Street pretend they believe the above nonsense about printing money to create wealth and employment, debt increasing without limit, and fiscally unsustainable policies continuing forever.

Implications

I suspect that the real leaders (political and financial elite) of the U.S. have supported and enabled unsustainable policies and practices knowing that a crisis and collapse of some sort must inevitably occur….[and when] the next financial crisis occurs, it will transfer a massive amount of wealth from the middle class to the political and financial elite and will consolidate more power under government control just like the crisis of 2008 did.

If, indeed, another crisis is imminent, then consider what the next several years will do to:

  • your income,
  • your expenses,
  • your wealth
  • consumer prices
  • the total National Debt
  • the size of the federal government

Get back to basics!…If intelligent people relentlessly pursue obviously unworkable financial policies down an unsustainable path, there must be an ulterior motive. Will you, as a middle-class American (European, Canadian) benefit from the consequences of that ulterior motive? Probably not! [If you are not prepared it is not as though have haven’t been forewarned.

Why You Should Own Some Gold

Counter-party risk could be devastating in the next financial crisis. If “B” owes you money and files for bankruptcy because “A” does not pay “B”, then you have counter-party risk that could be very costly. The value of gold and silver is NOT dependent upon a government or corporation paying a debt or fulfilling their promises. Gold and silver have no counter-party risk and will survive the next crisis.

The prices for gold and silver are dependent upon:

  • the total money in circulation (more money means higher gold prices),
  • real (nominal rate minus inflation rate) interest rates (lower rates mean higher gold prices), and
  • confidence or lack of confidence in governments and their fiscal policies.

I rate gold and silver as healthy and safe investments and the bonds of various sovereign nations as increasingly risky. Would you rather own gold or government bonds from Greece (Portugal, Spain, Italy, United Kingdom, or United States)?

Do you own enough gold and silver that you would feel safe in a financial melt-down? If not, why not? [Read: Do You Have Enough (Any?) Gold or Silver to Meet Living Expenses During a Time of High Inflation? Here’s What You Need]

*http://www.deviantinvestor.com/1831/back-to-basics-a-planned-crisis/

Other Recent Articles By the Deviant Investor:

1. U.S.’s Runaway Financial Train is About to Destroy the Status Quo

 

People riding a runaway train can party and remain oblivious to the fact that the train is about to crash into a huge obstacle. Our runaway financial train is about to destroy the status quo as it crashes into the obstacle of mathematical consequences – the inevitable financial train wreck. “If something cannot go on forever, it will stop.” [Let me explain.] Words: 974

2. Silver Projected to Reach $100/ozt. As Soon As Late 2015! Here’s My Rationale

There are many predictions for the price of silver. Some say it will crash to nearly $20, and others proclaim $100 by the end of 2012. The problem is that some predictions are only wishful thinking, others are obvious disinformation designed to scare investors away from silver, and many are not grounded in hard data and clear analysis. Other analyses are excellent, but both the processes and analyses are difficult to understand. Is there an objective and rational method to project a future silver price that will make sense to most people? Yes, there is! [And here it is!] Words: 1071

3. Gold Projected to Reach $4,000/ozt. Sometime Between Late 2015 & Mid 2017! Here’s My Rationale

I am not predicting a future price of gold or the date that gold will trade at $4,000, but I am making a projection based on rational analysis that indicates a likely time period for gold to trade at $4,000 per troy ounce. Yes, $4,000 gold is completely plausible if you assume the following:

4. Survival Investing: Stop the Inflation Monster From Devouring Your Savings – Here’s How

Don’t let the inflation monster devour your savings and retirement. It will unless you take positive steps to protect your savings and retirement. I have the answers as to: •why inflation occurs, •why your purchasing power will decrease, •what happens if you don’t protect your purchasing power, and •how to protect your savings and retirement.

5. Take Note: Don’t Say You Weren’t Forewarned!

It is relatively easy to predict further commodity price inflation as a result of the massive money printing going on worldwide and that hard assets, not paper assets, will help protect purchasing power but it is much more difficult to project where else this money printing leads and to what extent a crash is inevitable. What is the endgame? Will it be another financial crash such as in 2008 or will it be a more destructive financial and economic crash that causes a severe but temporary disruption in the delivery of goods and services? Words: 1470

6. Commentary on QE3 Exclaims: “We Have Been Warned!”

QE3 looks like a desperate act to feed money to large banks, offload MBS toxic waste from their balance sheets, devalue the dollar against houses, commodities, and other currencies and create significant collateral damage in the form of consumer price inflation according to a number of respected economists and critical thinkers on the subject of QE3. [Let’s take a look at what they have to say.] Words: 1661

7. 2013 Gold Price Projection: $2250-$2550 By Q2

An objective and reasonable estimate for the price of gold at the next intermediate peak (estimating 2013 – Quarter 2) is $2250 to $2550 per ounce… This is not a prediction based on wishful thinking and hope, but a best estimate based on rational analysis of data back to 1975. The actual price for gold at its next peak could be higher or lower, and the peak might be earlier or later, but this price range and approximate time is, by this analysis, the most probable. Words: 1682

8. Sell Some of Your Gold If and When Any 1 of These 10 Events Occur

Most of us will sell our gold sometime between now and never so what events will probably indicate that the time has come to sell at least some of your gold? Words: 910

9. Can I Invest in Physical Gold & Silver in My IRA?

I have an IRA. How can I invest in gold and silver? It is quite easy! Yes, I am talking about actual physical gold and silver, not “paper” gold, or certificates, or paper promises. Words: 621

Other Related Articles:

1. Gold Belongs in EVERY Portfolio – Including Yours! Here’s Why

I like gold because it’s a risk-reducing, portfolio-diversifying asset. It’s also been a strong-performing asset over the past decade – up nearly 400%. What’s more, it’s been reliable. In 2008, when the major U.S. indices plummeted 37% (and more into early 2009), gold returned nearly 6%. In addition to being an exceptional investment, however, gold has also been an exceptional investment within a portfolio context. That is, it has provided return while reducing portfolio risk. Gold has, in essence, been a free lunch. Words: 490

2. James Turk: Why Gold is Preferred to National Currencies

Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick. It is the purchasing power of national currencies that rise and fall. Here is an analogy to make this point clear. When standing in a boat and looking at the shore, it is the boat (currencies) – and not the land (gold) – that is bobbing up and down. [Let me explain the value of gold further.] Words: 631

3. Race to Debase: How Gold & Silver Have Performed vs. 75 Fiat Currencies

 

It’s that time of the year again where we examine how gold and silver have performed against 75 fiat currencies around the globe.

4. Nick Barisheff: $10,000 Gold is Coming! Here’s Why

This is not a typical bull market. Gold is not rising in value, but instead, currencies are losing purchasing power against gold and, therefore, gold can rise as high as currencies can fall. Since currencies are falling because of increasing debt, gold can rise as high as government debt can grow. Based on official estimates, America’s debt is projected to reach $23 trillion in 2015 and, if its correlation with the price of gold remains the same, the indicated gold price would be $2,600 per ounce. However, if history is any example, it’s a safe bet that government expenditure estimates will be greatly exceeded, and [this] rising debt will cause the price of gold to rise to $10,000…over the next five years. (Let me explain further.] Words: 1767

5. Take Note: Gold and Silver are NOT an Investment!

Gold and Silver are not an investment! Let me repeat that. Gold and silver are not an investment! Gold and silver are (excuse the pun) the most “solid” form of money you can possess. Yes, these two precious metals are money!…Don’t fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver. [Let me explain.] Words: 795

6. If You Don’t Think Gold IS a ‘Safe Haven’ Then You Don’t Know the Meaning of the Term!

It would seem that there is a considerable lack of understanding about what the term “safe haven” actually means when it comes to gold. Let me explain just what it means – and does not mean. Words: 740

7. Why, Pray Tell, Would I Want to Own Gold??

Comments I have made that “when this [financial crisis] finally ends the big winners are apt to be the ones who have lost the least purchasing power. Keeping score in nominal dollars is likely to be meaningless. Gold tends to hold its purchasing power regardless of what happens to fiat currency.” have prompted questions about a) how to achieve such purchasing power with physical gold when this stage is reached, b) how to go about buying things with gold coins and c) how gold would be utilized under the assumption that a barter system would develop when dollars become worthless. [Let me explain.] Words: 700

8. Gold is Not an Investment – Gold is Money – and Here’s Why

To fully understand gold’s role in an investment portfolio, we need to adopt a new mindset, a gold mindset which is, simply put: gold is not a bad investment, and gold is not a good investment. Gold is not an investment at all – gold is money.

9. Physical Gold and Gold Stocks Should be in Your Portfolio – Here’s Why

Do you own enough gold and silver for what lies ahead? If 10% of your total investable assets (i.e., excluding equity in your primary residence) aren’t held in various forms of gold and silver, we…think your portfolio is at risk. Here’s why. Words: 625

10. Buy Gold to Protect Your Wealth – Not As Speculation! Here’s Why

In our travels to the Middle East, the Far East and South and Central America [we have found that] most people in those parts of the world see gold as the protector of wealth [as opposed to] in the West where it is viewed as a commodity for speculation… [That shouldn’t be the case. Let me tell you why.] Words: 2159

11. Surprise, Surprise – Gold Is A Safer Investment Than Any Other!

A look at the gold price over the past 177 years reveals that – surprise, surprise – gold could be the safest investment out there! Words: 1377

12. What is Money – Really – and Why Do We Need to Own Gold – Really?

Have you ever wondered what money really is [and why we need to own some gold as a result]? You’ll notice that everyone you read has a strong opinion , but who’s right? [Let look at the situation and see if we can come to an answer that we both can agree on.] Words: 3086

13. A Message to Newly Minted (or Potential) Gold Bugs

I was taught years ago that “gold is not about price… gold is about value.” Be measured, be balanced and don’t make more of it than it is. Gold is just a tool, an anchor to sound money; to value.  [Let me explain.] Words: 1120

14. Don’t Laugh – Invest At Least 65% of Your Portfolio In Precious Metals!

 

There is such a “fear of gold” amongst most people that it must be due to statist indoctrination and propaganda because it makes no rational sense to have such a fear of such a time tested and true store of wealth. After all, we are talking about time tested and true money – the only money that has lasted for thousands of years and is still fully accepted worldwide as a store of wealth….What would you rather hold “for eternity” gold [or] US dollars [which are nothing more than] a paper debt obligation of a bankrupt nation state? Words: 450

15.  Believe It or Not: Only 1 Fund Has Outperformed Physical Gold Since 2007!

Out of the 7,500 separate mutual funds available, and with 22,000 shares classes to choose from, only 1 fund – just ONE fund – actually managed to achieve a greater percentage return than gold bullion since the alarm bells rang out at the turn of 2007! [That being said, are you still one of the 99% of investors who, for whatever reason (are you foolishly listening to the “advice” provided by your stock broker/securities salesman going under the guise of a financial “advisor”), is still without any physical gold or silver?] Words: 395

16. Your Portfolio Isn’t Adequately Diversified Without 7-15% in Precious Metals – Here’s Why

The traditional view of portfolio management is that three asset classes, stocks, bonds and cash, are sufficient to achieve diversification. This view is, quite simply, wrong because over the past 10 years gold, silver and platinum have singularly outperformed virtually all major widely accepted investment indexes. Precious metals should be considered an independent asset class and an allocation to precious metals, as the most uncorrelated asset group, is essential for proper portfolio diversification. [Let me explain.] Words: 2137

17. Which Gold and Silver Assets (and How Much) Should You Own?

It is no longer a matter of whether or not you should buy gold and/or silver but, rather, which type of investment(s) and how much. You don’t need a lot but you do need some – and here’s a primer on just what type of investment vehicles are available and recommendations on just how much you should buy. Words: 1086

18. It is Imperative to Invest in Physical Gold and/or Silver NOW – Here’s Why

Asset allocation is one of the most crucial aspects of building a diversified and sustainable portfolio that not only preserves and grows wealth, but also weathers the twists and turns that ever-changing market conditions can throw at it. However, while the average [financial] advisor or investor spends a great deal of time carefully analyzing and picking the right stocks or sectors, the basic and primary task of asset allocation is often overlooked. [According to research by both Wainwright Economics and Ibbotson Associates and the current Dow:gold ratio, allocating a portion of one’s portfolio to gold and/or silver and/or platinum is imperative to protect and grow one’s financial assets. Let me explain.] Words: 1060

19. Protect Your Portfolio By Including 15% Gold Bullion – Here’s Why

We are reading a lot of hype these days about gold and the necessity to own it but only about 2% of ‘investors’ actually have gold in their portfolios and those that have done so have insufficient quantities to offset the future impact of inflation and to maximize their portfolio returns. New research, however, has determined a specific percentage to accomplish such objectives. Words: 1063

20. Do You Have Enough (Any?) Gold or Silver to Meet Living Expenses During a Time of High Inflation? Here’s What You Need

NOone is expecting rampant inflation. After all, the CPI is low with nothing happening in spite of all this money printing. While there has been no fallout I think that is the critical point. You cannot do these kinds of things we are doing forever and not experience any consequences. Sooner or later there are going to be consequences to what we are doing, and my fear is that it is going to be nasty, catch a lot of people off guard, and really hurt our society. That is the bottom line and why I am buying gold and silver, still, to this day. Words: 795