The United States of America in now drowned in debt by $14.39 trillion. This debt, is obviously at an all time high for the country. The politicians from both parties seem to only care about winning elections and really do as little as possible to solve the problem of a debt burdened America. The current debt ceiling which is the legal limit that the country can borrow has been reached yet the U.S. Treasury continues to borrow more money, even this very week. President Obama continues to ask Congress for another $2 trillion in order to keep the government running as usual. Now lets be fair here, the debt ceiling has been raised by nearly every president on numerous occasions regardless of the political party. When I was watching the popular television program, Freedom Watch with Judge Napolitano, it was reported that the debt ceiling has been raised 70 times already. This is a rather fascinating number when you think about it. What is the point of having a debt ceiling when it can be raised at anytime?
We certainly live in a debt built society. The country and the world as we know it has been built on debt. The value of the U.S. Dollar is certainly not what it was years ago. This is due to the fact that inflation has inflated everything from homes, government, business, and the ultimately the money supply. My dad talks about going to a movie for 0.25 cents when he was kid. Today, a movie costs around $15.00 a ticket. My parents bought their first home for $27,000, today that same home sells for around $300,000. Has the value really gone up that much? Of course not, it increased in price because of inflation. Have we now reached a point in society where the inflation building has come to an end? Everyone knows that when you blow up a balloon the air will eventually leak out and deflate. Are we now at that phase of the economy?
At this time the stock market seems to only care about the falling U.S. Dollar Index. When the U.S. Dollar Index declines, the major stock indexes seem to inflate and trade higher. The opposite effect occurs when the U.S. Dollar Indexes trades higher, the major stock indexes will deflate and trade lower. Currency prices are dictating every move in the stock market right now. This is not sound money, and most politicians are either afraid, or just too dumb to address this problem. For crying out load, President Obama assigned a gasoline task force to find out why gasoline prices were climbing on a daily basis. Are you telling me that he could not figure out that gasoline was climbing for the same reason every other commodity was climbing, because the U.S. Dollar Index was falling! You see, politicians, like many on Wall Street, like to play dumb when things are not going so well. To my knowledge, there only seems to be one politician out there that has told the truth for years and his voting record is there to prove it, it is Congressman Ron Paul (R-Texas). This man has talked about the failed economic policies of the United States for years now and nobody wants to hear it. Congressman Paul has talked repeatedly about going back to a gold standard. This may not happen for many years, however, it is the only way that a new global economy can survive.
The days of printing money are coming to an end in my humble opinion. The fiat system was great for many years, however, it is no longer sustainable due to the debt that has been accumulated. I suppose it will have a few more years left before it finally ends. The U.S. Dollar can gets tossed around like a yo-yo by the central banks for a few more years to keep this ship sailing. Traders and investors should probably watch for a major gold and precious metals correction sometime this year. This is when the smart money will load the boat with the precious metal as the world moves closer to the gold standard in the coming years.