Today I would like to ask all the fine folks who happen to be reading this post a question. Have any of you paid much attention to the widely circulated National Debt Clock? The National Debt Clock is a live streaming, to the second calculation, of the federal debt of the United States Government. We at Kristos Trading feel that the National Debt Clock is so important and instructive that we decided to install it on the homepage of our company website (www.kristostrading.com). Please take a few moments to view it.
With the assistance of a cheap stopwatch, you can calculate how long it takes for the United States Government to accrue a million dollars in new debt. We know our readers have very busy schedules so we have saved you the time and trouble of doing it yourself. It takes a fraction over nineteen seconds for Uncle Sam to go in the hole another million dollars. That’s $3.16 million a minute; $189 million an hour; and $4.54 billion dollars a day!!! That’s every day! But there’s worse news. The pace of this insane indebtedness is accelerating dramatically. Ten to twelve years ago, the deficit of the United States was around $250 billion a year but now the US Treasury is racking up the same amount of debt in only a month! The projected debt for fiscal year 2010 should well exceed an astounding two trillion dollars!
When you ask someone to try to articulate how much a trillion dollars is, there eyes normally glaze over or they will respond with some silly cliché such as, "Golly, I have no idea but it sure is a lot more than I have heh, heh, heh..." Most of us have a very difficult time comprehending how large an amount of debt a trillion dollars actually is. But this interesting little mathematical factoid might give you just a glimmer into how vast an amount is represented by one trillion.
If you began spending one million dollars a day on the day Jesus Christ was born and continued spending one million dollars every single day since – through the fall of the Roman Empire, through the Dark Ages, through the Renaissance, through the Age of Enlightenment, and through the Industrial and our current Technological Revolutions – it would still take over another seven hundred years before you arrived at the one trillion dollar figure. Yet the US Government is now creating twice that much debt a year! How on earth can our government ever expect to repay these gargantuan amounts?
The answer is, of course, it won’t - or if it does, it will pay the debt off in trainloads of highly inflated and absolutely worthless currency. The debt calculator we have just mentioned shows a US National Debt of $12,777,643,550 when just viewed this evening. But actually, that is only a fraction of the fiscal black hole to which our elected leaders and bankers have consigned us. The true debt of the United States, if we take into account all the unfunded liabilities of Social Security, Medicare, Medicaid, government pensions, student loans, Fannie Mae, Freddie Mac bailouts, etc., etc., is somewhere between 75 and 100 trillion dollars. A hundred trillion dollars is equivalent to over seven years of the entire Gross Domestic Product of the United States. It is obviously impossible to ever raise enough taxes to remotely put a dent in the National Debt. This cannot be accomplished even if we tax every financial transaction and salary at a 90% rate. The only possible temporary solution is to postpone the financial Sword of Damocles hanging over the necks of the US citizenry by printing ever greater quantities of ever more worthless fiat paper currency and attempting to convince the people to accept it at face value.
In past times, if you lived under a despotic and/or irresponsible and financially repressive government an investor could protect his hard earned wealth by at least re-locating his assets into the currency of another country that was honest, fiscally responsible, and tied to a tangible wealth standard such as gold and silver. However, most unfortunately, all monies of every country now on this earth, is pure fiat currency. This is an unprecedented in the history of world economics. The bottom line is, all countries are going further into debt and printing ever expanding amounts of depreciating paper currency to cover over their losses. For example, since 1960, the money supply of Australia is up 180 fold. Think that’s bad? Be glad you don’t live in Taiwan. They have increased their national money supply over 380 times since 1962. And this trend is continuing in all nations and with an ever increasing acceleration.
The conclusion to this tale of woe is, that no paper denominated assets, be they stocks, bonds, money markets, exchange traded funds, just to name a few, can at this juncture be considered a safe haven for investors’ hard earned wealth, irrespective of the currency in which they are invested. In this corrupt and kleptocratic environment in which we find ourselves, there is really only one investment vehicle that has stood the test of time and survived all the hundreds and hundreds of failed paper currencies that have come before. That vehicle is Precious Metals – Gold and Silver. Don’t let the debt bomb destroy your wealth and the lives of the ones you love. Before it is too late and the price goes too high to afford, buy as much gold and silver as you can. They will be your ticket out of the economic Armageddon that is looming on the horizon.