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It’s all over the news these days the American Debt Crisis. Will the Democrats, Republicans & Obama ever agree to raise the debt ceiling in time before the US goes into default on paying its own debt? What will happen? Currently many Americans now have to actually use their credit cards just to buy food for their families and fuel for their cars. Their incomes are not enough anymore to cover these most basic monthly expenses due to ever growing costs through inflation. America’s Debt to GDP ratio is at 97% with an official $14.3 trillion overall national debt. However in truth you’re not really seeing the bigger picture. Here are the real facts… • $14.3 trillion: “official” national debt. • $5 trillion: The amount the US. Government still owes for bailing out Fannie Mae and Freddie Mac. • $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare. • This does not even include the $16.1 trillion in emergency loans between Dec 1, 2007 & July 21, 2010 that the Federal Reserve handed out on their own accord. The $ 16.1 trillion dollar figure was made possible due mainly to the efforts of Republican Rep. Ron Paul of Texas. We recently had our 1st ever audit of the Fed by the Government Accountability Office. (GAO) Boston University professor Laurence Kotlikoff writes in Bloomberg news "the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade to get the national debt situation under control". Of course this figure is no where remotely close to what is currently being debated upon on either side of the political fence. The U.S. has in fact defaulted several times on its debt obligations in the past. Here are some examples: • 1779: The US. Government was not able to buy back the continental currency it issued during the Revolutionary War • 1782: The original 13 colonies actually defaulted on the debt incurred to pay for the Revolutionary War. • 1862: While the Civil War was still going on the Union was not able to exchange dollars for gold at the original terms stated in the debt contracts • 1934: Franklin D. Roosevelt failed to pay back the debt that paid for the 1st World War, by refusing to redeem the debt in gold. Because of this at the time, the dollar was devalued 40 percent against gold. • 1979: Some smaller government debt interest payments went unpaid due to a bureaucratic mix-up that never was resolved. If the US Government moves onto a last minute deal to stave off the debt crisis, then most likely this move would stop pressure to sell off US Treasuries. The dollar would be reduced and the gold price might be re-tested again with a downward correction, while kicking the can of inflation down the road yet again. If all the players in Washington fail to reach the deal triggering a temporary default most likely the fallout from that would be a massive sell off of Dollars. The US Debt situation would then become a serious reality. If the US Government’s credit ratings were to drop just 1 notch (most likely more than that) to “AA” the interest rates would climb, costing the government over $100 billion just in additional interest payments. Furthermore you will be seeing gold prices reaching the $2,000.00 mark by year’s end. One more possible option if the debt ceiling is increased could be the intervention of the President using the 14th Amendment to claim the debt limit unconstitutional. The 14th Amendment states that the “validity” of government debt “shall not be questioned”. For President Obama to raise the debt limit himself thus bypassing Congress, many believe there would be enough cause for a law suit or impeachment. If not already, now is the time to get yourself invested into physical gold & silver to keep your assets from devaluing further. In the event the deal is made the fallout will only get bigger later thus protecting your assets even more from further currency devaluation. Tom Genot - About The Author: For information, news, articles and videos to invest in gold and silver and where the best places are to buy it. You will also find information for preparing and protecting you, your family and your assets from the pending economic crises and destruction of the US. Dollar. Author Tom Genot provides information and resources helpful to everyone. Insure your prepared beforehand, check us out at www.coinbullion.net.
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american debt, american debt crisis, debt crisis, debt limit, national debt, debt ceiling, debt, inflation, default, federal reserve, ron paul, 14th amendment,
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