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

Provided by Lear Capital. Questions? Speak to a specialist at (800) 428-1493. 4 Can the U.S. Debt Trap lead to $3,200 Gold? Putting Debt Growth in Perspective Consider this remarkable fact: in 1790, our national debt was a mere $71 million. It took 226 years to accumulate the first $10 trillion in debt. i Then it took less than 10 years to double that. This serves as a stark reminder that once borrowing becomes normalized and people stop caring, government debt can accumulate at a breathtaking pace, particularly in times of economic turmoil. In contrast, gold has consistently proven its long-term worth as a potential hedge against rising debt and economic uncertainty. With the prospect of increasing national debt levels and potential extenuating circumstances on the horizon, owning gold offers a prudent strategy to help protect and preserve your wealth for the future. Maybe that’s why central banks of the world have been accumulating gold at their fastest pace ever. ii Rising Debt: A Global Pandemic You’ve heard it said there are two things in life you can rely on – death and taxes. You can add government money printing to the mix. And that spells trouble for the value of the dollar – including every dollar in your portfolio. How did we get here and most importantly, what can you do about it? $307 Trillion of Global Debt — The World is Drowning in Debt The world economy could be about ready to buckle under the weight of its record-breaking, eye-popping amount of debt. Global debt has reached an unprecedented $307 trillion. iii It is the economic elephant in every boardroom that no one is talking about. No one seems willing to broach the subject of the one major threat to all of our financial futures: DEBT . And maybe that is because no one has a viable solution to this leviathan problem… How did we get here? Spending, spending and more spending. Since the last tie with the gold standard was severed by President Nixon in 1971, our government has spent its way into and out of crisis after crisis. The resulting debt has been building up and accumulating for decades – Here and globally. All semblance of fiscal prudence appears to have been discarded as the world careens from one crisis to another, continually kicking the can down the road rather than addressing underlying causes. There are growing risks and potential repercussions of this monumental debt load, including a lead up to a possible massive sovereign debt catastrophe. Some argue the origins of our escalating fiscal crises go back to the late 1990s, as Asia plunged into financial turmoil, Russia defaulted, and the Long-Term Capital Management hedge fund collapsed and nearly took the global economy with it. iv One could argue the government-negotiated rescue package of the LTCM fund led the way to normalizing full-on government bailouts. The Faustian bargain of privatizing profits while socializing losses Gold Price and U.S. National Debt: Correlation Coefficient of 91.2% How the National Debt Impacts the Price of Gold