The Only Logical Solution: Buy Gold

Christian DeHaemer

Updated January 26, 2012

Everyone is talking around it, but the fact is the United States is in real trouble.

I realize that this type of information is upsetting.

Back in 2005 and 2006 when I wrote that the housing bubble was untenable, and that you should sell, I was ridiculed.

As if it was my fault that the Fed — in a conspiracy with Congress and the banks — created an enormous and untenable housing bubble…

But please, don’t send me hatemail for what you are about to read in this article. What I am going to tell you is true. Your disdain for the facts won’t change them.

Shooting the messenger won’t change what’s going on.

Look, I’m a positive person. I don’t want to wallow in the negative.

I am a veteran, a businessman, and someone who believes in America.

And there is still a chance, if the politicians, businessmen, and cultural elite of this country act soon in the best interest of America, it can be saved. We’ve made it through hard times before…

But judging by the current political season, acting on hard choices will have to wait until there’s a crisis.

As I write this, the United States is $15.2 billion in debt. Our Gross Domestic Product (GDP), the total sum of everything produced by every American every year, is $15.1 billion. For every dollar the government takes in the form of taxes, it pays 43 cents for interest on debt.

You will owe more than $11,000 dollars this year in interest alone.

If you include unfunded liabilities like Social Security, military pensions, and Obamacare, the total debt is $117 trillion.

That equals more than $1,038,983 per taxpayer.

This is shocking because for almost two centuries, the U.S. was a creditor nation. We were frugal, hardworking, and pious.

But that all started to change in the 1960s as the lessons of the Great Depression were forgotten and generations of wealth were consumed.

By the 1980s, we borrowed more than we lent. The U.S. is now, by far, the largest debtor in the world.

Obviously, taxpayers won’t be able to pay more than a million dollars to fund these debts — even if you stretch it out over their lifetimes. The average taxpayer won’t even be able to pay the interest on this debt.

And it is obvious that the current crop of dufus-Americanus won’t even think about increasing their tax burden, nor accepting some form of cutback in their pensions, military spending, or other entitlements…

They got theirs, and you can bugger off.

It’s Coming

But it is coming. The numbers are what they are.

There are only three solutions to debt you can’t pay off: debase the currency, default, or create inflation.

The solution for the great Ben Bernanke and the House of Fed is to inflate the debt away by printing money…

Only they don’t print money anymore; they just increase debt by using the translucent and obfuscating wizardry of Wall Street created by 100 years of Harvard-MBA jibberjabber.

From the Fed press release, released yesterday at 12:30 p.m.:

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.

In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

Money for Nothing

When the news hit, the price of gold jumped from $1,650 an ounce to $1,712.

Today, gold hit $1,730. This was the biggest jump in more than three months.

Last week I told you the number one sell signal for gold is real interest rates (yield minus inflation). When real interest rates are negative as they are now gold goes up.

The Fed just told us all that real interest rates will remain negative for two more years…

Add to that the constant debasement of the dollar, and the only logical solution is buy gold, silver, and platinum.

That’s why on January 31st, we will be offering a FREE tutorial on precious metals investing. Join us to learn how to enjoy tax-free gold and silver profits, profit from gold’s upside, and protect yourself from the downside.

Only five days remain for you to secure your spot for this free online seminar. Space is limited, so sign up now.

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Christian DeHaemer

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Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.

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