Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Yellen has argued that the US Congress had raised or suspended the country’s debt ceiling about 80 times since 1960, and must do so again! and why not, its the only ting they can do!?
Even though the US government is now only weeks away from defaulting on its debt for the first time – which would, as Yellen warned, probably trigger a meltdown in financial markets – investors have been remarkably calm.
Obviously, yields on long-term US bonds would rise if investors were forced to factor in some default risk.
But even a drawn-out battle over the debt ceiling could lead to another downgrade of the US credit rating, which would also probably push US bond yields higher.
Because the US government is running such massive budget deficits, a spike in borrowing costs – either from an actual default or from a protracted fight over the debt ceiling – will add to its debt servicing costs.
The US budget deficit is expected to swell to $US3 trillion in fiscal 2021 – or roughly 13.4 per cent of GDP – as a result of the stimulus measures Washington adopted to soften the economic impact of the pandemic.
And people think there is a rational basis for gold price in terms of US$ (any $ in fact) is going to go down?
US Congress is so divided and so partisan that rationality doesn’t prevail, and thats been going on for sometime now. No sign of change. No reason to be confident it will change.
And coming up ... Bernie Sanders’s $3.5 Trillion Budget Bonanza
Democrats want free everything with no accountability. Higher taxes will follow, and why not? whats the choice?
https://www.wsj.com/articles/bernie-sanders-budget-spending-taxes-trillion-11628547479
good luck to us all!
best
the gnome
To put the US current year debt into perspective , their total national debt built up since records began only stands at US$ 19.3 trillion, this equates to 107 % of their GDP ..They are 13th highest on the list ... The highest is Japan with 227% ..triggered mainly by propping up the banks after their stock market crash back in 1992.
Incidentally the UK Stock indices is the same now as it was at the end of 1999...22 years ago..so no nominal capital growth ..just dividends
UK national debt is about 85 %. It is the 30th highest..
Surprising Russia is one of the lowest at around 25%
According to the report Egypt's Debt is just 9% although I don't believe those figures
Yes, thanks CI. Its not so much the debt now, but the strategy going forward, and the ability to execute the strategy. It does appear to some tht the USA is so divided, that they are only marginally sort of Civil War. The Bernie Sanders coalition of the least able, is one case in point. On the other hand, productivty gains? Achived through the internet? What real productivity gain does Facebook drive? How many buy something advertised on Facebook? Who really knows?
Have you plotted the price of gold versus the debt ceiling hikes?
The latest letter is at
https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress_20210908_FINAL-Pelosi.pdf
best
the Gnome
Gnome ..Wow ! Is my reaction to that letter . I had no idea that things had got so bad ... How did you get hold of the letter ? Is it in the public domain ?
No I haven't plotted the correlation of the price of gold with increases in debt ceilings ..presumably they rise in tandem as a safe haven ?
Can you see a comparison here between the claimed productivity gains of the internet now, and the same productivity gains hailed during the internet bubble of 1999 ? The same arguments were put forward .
The current PE ratio of the S&P is 38...(Tessla's PE ratio is 349 !!).
The current S&P ratio is 90 % above the historical average pe ratio of 19.6
90% is approaching the all time peak of 132% reached at the height of the US bubble. !
The market will ultimately head for a crash , because at some point it will revert to the mean .
Of course , just because it's high , doesn't mean to say it can't get even higher , but that doesn't take anything away from the fact that the S&P is seriously over valued.
So time to avoid I would say , or if you remain invested then fasten your seatbelts is what I am saying to US market bulls.
It would be interesting to see the respective figures for the FTSE.
Hi Mr Gnome,
Thank you for posting the letter, incredible certainly evidence that the ordinary people have little idea of what takes place behind closed doors
Yes many thanks goldgnome.
A very fair assumption Candid, seems very logical ,except that the FED Cartel have control of the Comex dumping levers and they care not a jot about the regulators because they control them as well!