This Is the Proverbial Ball You Should Be Keeping Your Eye On…
Gold, the Brief History of U.S. Debt, Not a Great Club, and the U.S.’ Debt-to-GDP Surpassing Venezuela’s
“Blessed are the young, for they shall inherit the national debt.”
~ Herbert Hoover
If you’re like me, you probably sometimes come across an important economic or geopolitical event in screaming headlines and think, “That’s bullish for gold.” But then the metal moves in the opposite direction from what you were expecting. Doug Casey always tells us not to worry about short-term fluctuations — and he’s absolutely right — but it’s still frustrating at times.
Now, it’s easy to dismiss these thoughts because gold has recently hit new all-time highs, topping $2,400 per ounce.
But remember, there’ve been plenty of corrections during this gold bull run. And trust me, there’ll be many more.
When they happen, it’s easy to get distracted, lose patience, even sleep, and get shaken out of an otherwise winning investment.
That’s why it’s crucial that you always keep your eye on the ball. Which, I should say, is more like a snowball in this case.
Snowball's Gonna Snowball
Major financial, economic, or political shifts don’t just happen overnight. They’re more like a snowball rolling downhill, picking up speed and size along the way. Eventually, they reach a tipping point, transforming into full-blown crises, catching the unprepared off guard.
And, of course, there’s no better example of this today than the the ever-growing snowball of the U.S. debt that has become so big it’s already engulfing our whole economy. Consider this chart.
Notice that government debt was practically nonexistent halfway through the 20th century, but has seen a dramatic increase in the following decades. This happened with the expansion of federal government spending under Presidents Franklin D. Roosevelt, Lyndon B. Johnson’s, Richard Nixon. And debt just kept snowballing since.
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