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

5 Can the U.S. Debt Trap lead to $3,200 Gold? only exacerbated the economic environment by providing perverse incentives around risk. Why minimize risk if the government stood at the ready to bail you out and put all the risk on taxpayers. Do you have any idea the damage done to you by all this debt accumulation? Per the U.S. Debt Clock, v every citizen in the U.S. is an EXTRA $628,000 liability, or debt. That’s debt over and above any personal debt each person has. And I mean each person, including babies. That means, if you have an average family of four, your family has additional debt of $2.5 million dollars. What could possibly go wrong? The 1999-2000 dotcom bust followed the LTCM debacle, further unsettling global markets. The tragic events of September 11, 2001, and the subsequent financial crisis of 2008 marked additional waypoints on this turbulent journey. Our government authorities responded to these waves of economic turbulence with bigger and bigger waves of government debt issuance and hyper-aggressive monetary policies. Politicians basically ceded control to the central bank, allowing them virtual carte blanche to paper over the problems. When the government did intervene, it was through the issuance of ever- larger stimulus and debt waves to gin up economic growth, with central banks stepping in to enable the profligate spending. Other major world powers followed similar patterns set by the United States. In this evolving landscape, treating the symptoms of financial crises, rather than addressing their underlying causes, became the norm. A new playbook emerged, characterized by an arms race of borrowing and monetary easing that continues to this day. The exponential growth of global debt, now standing at $307 trillion, (not including an additional quadrillion dollars of derivative debt) is a testament to this unprecedented competition. The Calm Before the Storm Amid the relentless expansion of debt, the world has managed to stave off the feared sovereign debt catastrophe thus far. However, it comes at a cost, for this colossal debt load poses an impending threat. Instead of addressing debt, reining it in and paying it down, it has been expanded exponentially. The pain that is necessary and almost inevitable has always been put off and put off. Should a major catastrophe materialize, the bag of tricks at central banks could be empty. The world would be faced with 307 trillion reasons to worry about the profound and unpredictable reshaping of the global economic landscape. The silence surrounding the $307 trillion global debt may be deafening, but it cannot mask the gravity of the situation. The world has witnessed a remarkable departure from traditional fiscal prudence, embarking on an era defined by ever-larger debt issuance and monetary easing. The looming avalanche of global debt casts a dark shadow over the economic future. You are Not Powerless But YOU are not totally powerless against these dynamics. When the markets and everything else in your portfolio goes down, something always goes up. Finding that asset Increased military spending to aid our allies can rapidly accelerate US Debt.