$3,200 Gold - How the U.S. Debt Trap Could Get Us There

3 Consider - following the dotcom crash, gold hit a low of $256 an ounce. At that same time our national debt stood at just $6.5 trillion. Fast forward to today, and gold is trading at close to $2000 an ounce, nearly 8 times higher. Yet, what’s even more astonishing is that our national debt has soared to over 5 times its 2000 levels. This means that gold’s price has risen at a rate approximately 1.6 times faster than the growth of our national debt since 2000. By 2007, before the housing crisis, the national debt had risen to $9 trillion, and gold was at $665 an ounce. Again, largely keeping pace with the spending and printing excused by the crisis. Lengthen the timeline and the effect is even more astounding. Our debt increased 44.5 fold since 1974, going from $725 billion then to over $33 trillion now. In the same time period, GOLD went from $35 an ounce to now approximately $1950 – a 55.7 times increase! Gold doesn’t just keep pace with the money printing – it leaves the dollar in the dust! It’s as predictable as death and taxes! Gold has DOUBLED during the last 2 crises. But it could be much better than that. Put another way: Consider that in the aftermath of September 11, 2001, gold doubled in less than 5 years. It was $272 in August 2001 and climbed to $549 in January 2006. It doubled again through the housing crisis of 2008 and the aftermath, going from $665 in August of 2007 to $1346 in October of 2010. If you believe, like many experts do, that we are facing The Big One, brought on by a monstrous and unsustainable amount of debt, wouldn’t you want to invest in something that DOUBLED during two recent crises? According to projections from the U.S. Debt Clock, our national debt is expected to reach a staggering $45 trillion by 2027, a 36% increase from today’s levels. If, hypothetically, gold outpaces debt growth by 1.6 times, gold could reach $3200 an ounce by 2027 —representing a 60% increase from its current value. These predictions, if anything, could be too conservative. Various extenuating circumstances could easily push our national debt even higher and potentially drag the gold price higher along with it. For instance: 1. Economic Downturns: In the event of an economic crash, tax receipts could plummet as spending simultaneously increases, leading to a faster rate of debt growth. 2. Geopolitical Factors: International tensions or conflicts (Ukraine, Israel! Taiwan???) may necessitate increased military spending, contributing to accelerated debt accumulation. 3. Bailouts and Stimulus: History has shown that bailouts and stimulus packages can lead to substantial debt increases. After the 2008 financial crisis, for instance, debt doubled within just eight years. $5 trillion was printed to cover lockdown stimulus checks. Bailouts and stimulus are becoming accepted precedent in Washington and there could very well be more to come. The Future of Debt and Gold The price of gold doubled during the last two crises.