The Gold Mine

As European markets closed this morning, all bids disappeared from USDJPY and the pair dropped back below 114.00. In its mirror-like manner, gold reflected this tumble and surged above its 100-day moving average over $1280.

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http://www.zerohedge.com/print/606714

Right now, the United States is officially $20 trillion in debt. Over half of that $20 trillion was added over the past decade.

And it looks like annual deficits will be at the trillion dollar level sooner than later when projected spending is factored in.

Basically, the United States is going broke.

I don’t say that to be hyperbolic. I’m not looking to scare people or attract attention to myself. It’s just an honest assessment, based on the numbers.

Now, a $20 trillion debt would be fine if we had a $50 trillion economy.

The debt-to-GDP ratio in that example would be 40%. But we don’t have a $50 trillion economy. We have about a $19 trillion economy, which means our debt is bigger than our economy.

When is the debt-to-GDP ratio too high? When does a country reach the point that it either turns things around or ends up like Greece?

READ MORE:

//dailyreckoning.com/golden-solution-americas-debt-crisis/

It really should be clear that a major international banking crisis is inevitable, and likely to occur fairly soon. Due to the extreme debt levels, many banks are close to that point of failure.

An event like a stock market crash is likely to push many banks to that point of failure, since the pressure it would create (on cash resources), would expose their inability to fulfill their obligations.

Cash (not bank credits/digits) is still the means by which banks have to settle liabilities and obligations (especially amongst each other). If a bank goes down, it will be due to the lack of cash (not bank credits/digits). It is for this reason that there is a campaign to ban cash (for the general public) or limit the use of it.

The banks are in competition for the available cash resources, and they do not want you to be an obstacle. This is similar to what happened during the Great Depression (1933) when gold was confiscated. Then, banks proved their solvency with gold; therefore, the general public was prevented from competing for the limited amount of gold resources.

It is for this reason that I believe it is very unlikely that gold would be confiscated during this crisis. Today, it is cash that is the cornerstone of the banking system (especially the US dollar), since it is cash that is promised, not gold.

READ MORE:

//hubertmoolman.wordpress.com/2017/09/10/gold-and-the-coming-collapse-are-we-close-to-a-major-monetary-event/