Political uncertainties here in the States and in the UK and a weaker dollar have given the price of gold a boost this morning.
Equities to open slightly lower as the market is starting to get tired of all the Washington politics with four prominent Republicans stating that they cannot support the Healthcare bill as it stands today. That puts the Republicans in a corner as these four defecting members leaves them a few votes short of passing the health care bill. Which in turn delays the tax reform proposal.
Speaking of tax reform, I will now lay out my argument for why I believe it’s a very bad idea and in the long run could have serious consequences for our country.
First I just thought it would be appropriate to share with you how bad we as Americans are handling our finances.
One in four have no savings. Many are more worried about their next vacation rather than saving for retirement. Individuals here in our country have amassed over one trillion dollars in credit card debt. Overall public debt is reaching 14 trillion.
Now to the real eye opening stats on Americans. Please read these numbers twice so you can absorb how serious the situation really is.
- 42 million Americans living in poverty
- 31 million without health insurance
- Over 62 million collecting social security
- 56 million enrolled in Medicare
- 74 million Medicaid recipients
- 41 million food stamp recipients
- 164 million people on some kind of government assistance
The GOP House committee on the Budget shows the U.S. National Debt at 20.3 trillion dollars. Debt per individual is almost 60 thousand dollars.
The question remains, will our government ever pay off its debt? We all know that its political suicide for any politician to cut the big three: Social Security , Medicare or Defense.
And now with everyone screaming for a tax cut, how in the world can we stop our countries debt from exploding?
Economic growth sparked by tax cuts? Really? Who’s buying that line?
Most economists are expecting the economy to grow this year by only 1.5 percent. Way short of the President’s expectation of 3 to 4 percent growth that’s needed to offset the proposed tax cuts. Without that kind of growth those tax cuts will terribly inflate the country’s debt to an even higher unsustainable figure.
Next question I must ask you is, if this is the track Washington is taking us on, can the United States be the next Greece? Does anyone think the U.S. is ready for an austerity plan ?
No shot you say, there would be chaos in the streets, bedlam everywhere. I agree.
So how do we fix it or do we just leave it for future generations?
The answer is we most likely will never pay off our debt. The country’s debt will only be an issue when the rest of the world becomes worried that the U.S. can’t meet its future commitments. Don’t think that it CAN’T happen, because if we continue down this path, it will be an issue we will have to address.
In many of my previous comments I made reference to the countries over the pond like Greece, Italy, Portugal and Spain that are just hanging around the European Union waiting for a hand out. When you look at how many people here in America are on some kind of government assistance, one can only come to the conclusion we are in deep, deep trouble.
I will spare you the pain of reading about what austerity measures need to be put in place to stop the government on defaulting on its obligations. That can be in a future comment, but I assure you it isn’t pretty and downright scary.
So if you are content with the status quo, just go on doing what you are doing. If not, shouldn’t you consider physical gold as an investment? When the paper in your pocket becomes just paper, physical gold can be the only asset worth holding.
Have a wonderful Friday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.