$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. 6 Can the U.S. Debt Trap lead to $3,200 Gold? is just a matter of strategy and balance. Gold, often revered as the “ultimate hedge,” possesses a long-term track record of hedging fortunes. In these tumultuous times, investing in gold and silver can be a prudent move; if not a necessary act of self-preservation. You’ve probably been hearing about the national debt all your life. Yes, it’s a problem. There doesn’t seem to be any solution. Life goes on. So, why worry — why ? Many reasons… 1. Economic Stability: Excessive government debt can lead to economic instability. When governments borrow too much, they may struggle to meet their debt obligations, potentially leading to defaults or the need for more significant borrowing. These events can trigger financial crises, which can have severe consequences for individuals, including job losses, reduced economic growth, and financial market turmoil. 2. Taxpayer Burden: Government debt is ultimately paid for by taxpayers. When governments borrow, they must repay the borrowed funds with interest. This often requires increased taxes, reduced public services, or both. High levels of government debt can lead to higher taxes, leaving individuals with less disposable income. And you know what happens when your disposable income disappears right? You got it — a shrinking economy. 3. Reduced Public Services: Governments with high levels of debt may be forced to cut back on essential public services, such as healthcare, education, and infrastructure development, to allocate more resources to debt servicing. This can negatively impact the quality of life for citizens. 4. Interest Costs: A significant portion of government spending goes toward paying interest on the debt. The time is fast approaching where interest on our debt, entitlement payments, federal welfare and federal pension payments (non-discretionary spending) will be greater than all the taxes collected by the U.S. Government. When that happens, we will be borrowing money just to pay the interest on our debt. That’s the “Crash Point.” 5. Crowding Out Private Investment: When governments borrow heavily, they may compete with private borrowers for available funds in the credit market. This can lead to higher interest rates for businesses and individuals, making it more expensive to finance investments and projects, potentially stifling economic growth. 6. Inflation Risk: If governments resort to excessive borrowing and central banks respond by printing more money to cover the debt, it can lead to inflation. Inflation erodes the purchasing power of money and can negatively affect the savings and financial security of individuals. 7. Inter-generational Equity: High government debt levels can place a burden on future generations. When governments accumulate debt, they are essentially passing on the cost of today’s spending to future taxpayers, potentially limiting their economic opportunities and well-being. That high level of debt your family is currently in will be passed on for generations to come. 8. Creditworthiness: A country’s level of debt can impact its creditworthiness and access to credit. If a nation’s debt becomes too high and its credit rating is downgraded, it may face difficulties in borrowing at favorable terms in the international financial markets. 9. Political Decision-Making: High levels of government debt can influence political decision-making. Policymakers may prioritize short- term political gains over long-term fiscal responsibility, leading to unsustainable policies and a focus on populist measures rather than prudent economic management. If you don’t think these issues have really affected you, think about Why you should care about U.S. Debt