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All posts under ‘US Economy’

Americans Pawn Gold To Go Further Into Debt: US Gold Scrap Market Drying Up

It is quite unfortunate that Americans have pawned off their best asset only to go further into debt. U.S. gold scrap supply in 2016 (58.7 metric tons) is nearly two and a half times less than it was in 2010 (143 metric tons). Americans pawned off a great deal more gold in 2010 when the price was lower at $1,225 compared to $1,267 in 2016. Which means, the U.S. gold scrap supply market is drying up.

Bankrupt America: Interest On Debt Alone Approaches A TRILLION Dollars

The Trump economic cabal of Wall Street asset strippers is proposing tax & economic programs that will blow an already unprecedented US debt situation into the stratosphere. Budget deficits (already over $19 trillion) under the Trump plan could easily surpass $2 trillion a year. As Federal debt goes beyond $20 trillion, with normal interest levels, interest on debt alone approaches $1 trillion.

The Next Subprime Crisis - The US Auto Industry Is Here

Auto loans made to consumers with subprime credit have been accounting for an increasingly larger percentage of the market. Eventually a lot of those loans are going to start to go bad, and that is precisely what is happening now. Auto sales have begun to fall & used car prices have started to crash. Here are 12 signs that a day of reckoning has arrived for the U.S. auto industry.

Trump & the Monumental Magnitude of the US Debt Trap

What lies directly ahead, therefore, is another bumbling attempt by the White House and Congressional Republicans to hammer out an FY 2018 budget resolution and what amounts to a 10-year fiscal plan. So there flat-out must be big-time deficit offsets or there will not be close to 218 votes for what would otherwise be upwards of $15 trillion in added public debt over the coming decade.

What Role May Trumps' Policies Play in Creating Inflation

Among the main drivers of higher inflation expectations, one is the idea that a larger fiscal deficit will inevitably lead to higher inflation. The Trump program calls for higher defense expenditures and increased infrastructure spending. The perception in the financial markets is that fiscal spending and tax cuts add up to higher deficits, which would almost certainly imply higher inflation.

Read America's Credit Card Statement (No Password Required)

You might not be aware of it, but America’s credit card–our national debt–comes with its own disclosure statement. You know those disclosures on your credit card statements? That it will take 27 years to pay off your balance if you only make the minimum payment each month, and so on? What will replace the current system after it self-destructs? That’s the question.

Why is the Gold Market Sanguine about Rising US Interest Rates?

Why is the gold market being sanguine about rising U.S. interest rates? Rising U.S. inflation and a peak in U.S. dollar strength may mean that the traditional impact of a U.S. monetary tightening cycle may be less than usual. What the gold market is currently signalling is that while U.S. interest rate rises are still a bit of a headwind, they may not be enough to offset some compelling tailwinds.

The Return of the US Government’s Statutory Debt Ceiling

The budgetary bottleneck arrives again next month, when the latest suspension of the limit expires on March 15. Back in October 2015, Congress decided to punt on the issue by suspending the debt ceiling—with a hard end date. The US Treasury Department has been actively working to keep the nation’s total public debt outstanding from rising any faster than possible since late Nov 2016.

A Mega Sell-Off in U.S. Government Debt is Underway... 1 more Reason to Buy Gold

Foreign creditors are selling U.S. government debt like never before. Last year, China alone sold $188 billion worth of U.S. Treasurys while Japan sold about $21 billion worth of U.S. debt in December. Japan & China are America’s biggest creditors. But they’re not the only ones pulling out either. Saudi Arabia, Belgium & Switzerland have recently become net sellers, too.

American Consumer Debt Over $4.1 Trillion - Last Debt Bubble Peak was at $2.5 Tn

Americans are now borrowing & spending at record levels. Consumer debt being over $4.1 trillion is troubling when student debt, auto loans & credit cards are leading the way forward. Apparently we like repeating history & people may like to forget that at the root of the Great Recession was a giant credit bubble. Even at the peak of the last debt bubble, consumer debt totaled roughly $2.5 trillion.

A Gold Standard would've Prevented U.S. from this Extreme Indebtedness

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.” Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold.

The Real US Economy - A Full-Fledged Credit Crisis Is Inevitable

Americans are filing bankruptcy at the fastest rate in years… A growing number of U.S. businesses are going bust… The value of U.S. auto loans topped $1 trillion for the first time ever. Outstanding credit card debt has also surged to record highs. The value of student loans has doubled since 2009. All this wouldn’t be such a big problem if the economy were doing well… But it’s not.

Is Trump Bad News for Gold? The Prospects for Gold under President Trump

Trump or not, the fundamental problems remain deep seeded in the US economy. “Draining the swamp” and “making America great again”, are easier said than done. This is why a serious investment into gold is for the long haul. Look beyond the short-term speculations & projections. Its clear that conditions will not be favorable either way & things appear increasingly dismal.

"Too Many Promises That Can't be Kept" - The Fed Can't Raise Rates: Paul Volcker

One can’t really blame the government for continuing its debt-funded spending spree – despite protests to the contrary – after all rates are so low, it would be irrational not to take advantage and add on more debt. However, it is here that the punchline from the Volcker op-ed kicks in, and explains why the Fed is stuck and will find it next to impossible to hike rates.

The Fed's Measure of Inflation is Furthest from American Reality

Ben Bernanke first set an official inflation target in January 2012, aiming at 2%. Has it been achieved? Well, it depends on how you measure inflation. There are many to choose from. The Fed has chosen the one that is most suppressed and furthest from the experience of most American households. So the Fed can pretend that inflation is “too low,” whatever that means.

Price of Gold Could Rise a Lot Higher - In Fact Double

There’s a difference between the narrative, which is what you’re being told, versus the reality of the economic data. It’s in no one’s interest ahead of the election to say the U.S. economy is a mess. If the flood of bad economic data continues, the Fed will almost certainly print more money or cut interest rates. And that could easily send the price of gold through the roof.

Global Gold and Silver Produced in 3 Years = Only the Interest on US Debt

The financial disaster taking place at the US costs one heck of a lot of gold and silver. In 2015, the US Federal Government paid $402 billion just to service the interest on its debt. The total value of global gold production in 2015 was $122 billion while that of silver was $14 billion. So the US could purchase 3 times the global gold and silver production in 2015, just by the interest on its debt.

Why The US Consumer Will Cause The Next Crisis

The market is materially mispricing the strength of the US consumer whose weakness will lead the US economy into a recession in Q117. The divergence is a result of the top 40% of earners who have accrued 84% of all new income and only 34% of new debt since 2013. This strength has driven headline sales figures and accounted for nearly all deleveraging since the financial crisis.

If the Fed does What it Wants to, the Result will be the Opposite of What it Wants

The US economy is slowing perceptively. What should the Fed be doing? They might want to cut interest rates. Problem. Another tool in the arsenal – cheapen the US dollar. Again there is a problem. Whether that works & what is a good idea are separate issues. Certainly a rate hike would take the stock market down 20%. It’s going to be just the opposite of what the Fed wants.

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