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Gold price and US debt

derrybderryb Posts: 36,016 ✭✭✭✭✭
edited July 5, 2023 12:48AM in Precious Metals

"Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

Comments

  • GoldminersGoldminers Posts: 3,560 ✭✭✭✭✭

    The direct correlation is there.

    The US National debt is now already 32.3 trillion, but the real debt number counting state, local, business, household and financial institutions, just hit a major milestone.

    It is now $100.98 trillion. This is a real problem.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    More nonsense marketing. They cherry-picked the time frame by starting from a once-in-a-generation low of 1970 which can never be repeated or even approximated.

    And gold is no longer where investors go when turmoil hits. Gold daily trading volume is up 60-fold since 1980....but foreign currency market trading is up 7,000-fold. Bond market volumes up much more than gold, too.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @Goldminers said:
    It is now $100.98 trillion. This is a real problem.

    That's not a real number. It just reflects liabilities out to 2075 or 2100. Too many variables to accurately forecast. Also, asset growth will offset liability growth plus regular income.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    Notice the chart shows gold going DOWN and doing nothing for 20 years from 1980-2000 even as the debt increased.

    No, there isn't a direct correlation across many/most time periods. :)

  • GoldminersGoldminers Posts: 3,560 ✭✭✭✭✭

    @GoldFinger1969 said:

    @Goldminers said:
    It is now $100.98 trillion. This is a real problem.

    That's not a real number. It just reflects liabilities out to 2075 or 2100. Too many variables to accurately forecast. Also, asset growth will offset liability growth plus regular income.

    That number is a real time running total from the Federal Reserve data. It is more like $192 trillion if you add in more projected future unfunded liabilities like Medicare and social security.

    The National debt in the graph above, which is the face or principal amount of government securities, is projected to increase to $43 trillion, from the current 32 trillion in just 4 years. More debt ceiling increases ahead.

  • tincuptincup Posts: 4,721 ✭✭✭✭✭

    @GoldFinger1969 said:
    More nonsense marketing. They cherry-picked the time frame by starting from a once-in-a-generation low of 1970 which can never be repeated or even approximated.

    And gold is no longer where investors go when turmoil hits. Gold daily trading volume is up 60-fold since 1980....but foreign currency market trading is up 7,000-fold. Bond market volumes up much more than gold, too.

    Got to start somewhere. Where would you have started the graph?

    ----- kj
  • tincuptincup Posts: 4,721 ✭✭✭✭✭
    edited July 7, 2023 6:21AM

    @GoldFinger1969 said:
    Notice the chart shows gold going DOWN and doing nothing for 20 years from 1980-2000 even as the debt increased.

    No, there isn't a direct correlation across many/most time periods. :)

    Yes.... it shows time periods when gold price goes down compared to debt.... and time periods when the gold price goes up compared to debt. I don't understand your counterpoint. And, do not know why you seem to have objections to what appears to be a pretty straight forward simple graph/chart.

    HOWEVER, I certainly do not know the actual data that was used to compose the graph. And.... like I've mentioned before.... one can finesse statistics and graphs to 'prove' nearly whatever they want.... types of graphs, data that cannot be easily verified, time periods selected, different data sources, and on and on. Other than that.... 'seems' a rather straight forward graph.

    ----- kj
  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @tincup said:
    Got to start somewhere. Where would you have started the graph?

    I wouldn't. I realize that rolling time period eliminate timing bias and the nature of the chart is flawed. You might just as well track the price of gold against hours playing video games or the number of NFL teams and claim a correlation. :)

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @tincup said:
    HOWEVER, I certainly do not know the actual data that was used to compose the graph. And.... like I've mentioned before.... one can finesse statistics and graphs to 'prove' nearly whatever they want.... types of graphs, data that cannot be easily verified, time periods selected, different data sources, and on and on. Other than that.... 'seems' a rather straight forward graph.

    But the data is being misused. A 20-year period of rising debt and a nothing gold price is NOT just a 1 or 2 or 3 year time-out. It's 2 decades.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @Goldminers said:

    @GoldFinger1969 said:

    @Goldminers said:
    It is now $100.98 trillion. This is a real problem.

    That's not a real number. It just reflects liabilities out to 2075 or 2100. Too many variables to accurately forecast. Also, asset growth will offset liability growth plus regular income.

    That number is a real time running total from the Federal Reserve data. It is more like $192 trillion if you add in more projected future unfunded liabilities like Medicare and social security.

    The National debt in the graph above, which is the face or principal amount of government securities, is projected to increase to $43 trillion, from the current 32 trillion in just 4 years. More debt ceiling increases ahead.

    Everything is an unfunded liability. Your mortgage is am unfunded liability.

    They will just raise taxes. Problem solved. You won't like it, but will accept it, and they know that.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭
    edited October 20, 2023 10:31PM

    @cohodk said:
    They will just raise taxes. Problem solved. You won't like it, but will accept it, and they know that.

    Just read a fascinating analysis on AI and the possibility it will raise GDP growth by 1.5% annually. U.S. is in the lead. Will do wonders for tax revenues, fiscal restraint, and paying off debt.

    Biggest beneficiaries likely to be the U.S. and UK. :)

  • GoldminersGoldminers Posts: 3,560 ✭✭✭✭✭

    Utopians have so much gold and silver that they use it to make their bathroom fixtures, and they scorn the metals rather than covet them. This way, if gold and silver are needed, such as to pay soldiers in wartime, citizens will not hesitate to turn them over.

    Thomas More 1478-1535.

  • ApplejacksApplejacks Posts: 384 ✭✭✭

    US debt means nothing. Just like Apple’s debt doesn’t either.

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,757 ✭✭✭✭✭

    This whole debt thing for government is a lie. The government has zero debt. And they're not borrowing and they never pay back. They take and take and pretend there is service to the people, when in fact they convince the masses that we all are their servants. Don't work that way, brothers. Oh but if you want to buy that you're a slave, go ahead.

    Let's talk government shut down. It won't happen. If it does, the people can run this place just fine. Or did everyone forget "WE'' ? So get out of the way of the people.

  • privatecoinprivatecoin Posts: 3,140 ✭✭✭✭✭

    Can you really over spend yourself into prosperity?

    Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc

  • GoldminersGoldminers Posts: 3,560 ✭✭✭✭✭
    edited October 26, 2023 1:19PM

    @privatecoin said:
    Can you really overspend yourself into prosperity?

    If you spend borrowed money and you get the debt forgiven, or you make payments by rolling it over into more debt, until you die. Plenty have read that book, and seem to be following it, the past several years.

  • blitzdudeblitzdude Posts: 5,283 ✭✭✭✭✭

    @Goldminers said:

    @privatecoin said:
    Can you really overspend yourself into prosperity?

    If you spend borrowed money and you get the debt forgiven, or you make payments by rolling it over into more debt, until you die. Plenty have read that book, and seem to be following it, the past several years.

    Exactly! Perhaps those of us not following it are just the "losers and suckers"? SeMPeR!!

    The whole worlds off its rocker, buy Gold™.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @Applejacks said:
    US debt means nothing. Just like Apple’s debt doesn’t either.

    Apple has very little debt and tons of cash.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @privatecoin said:
    Can you really over spend yourself into prosperity?

    That's the wrong way to look at it. If what you were saying were true, every family that took out a 30-year mortage to buy a house would be in financial ruin.

    Since the United States is the world's reserve currency, it MUST run a capital account surplus or trade deficit.
    This necessitates printing a higher-than-normal supply of U.S. dollars to satiate U.S. domestic and global demand for the currency.

    The issue for the U.S. is this: is the real debt burden -- which involves interest expense to PUBLIC holders of U.S. debt (not govt agencies) -- rising or falling in relation to nominal GDP growth. This is the inverse of the "Denominator Effect" which is the ratio of net government debt to nominal GDP.

    This is not a problem for the U.S. but is for stagnant countries like Greece, Italy, etc.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @Applejacks said:
    US debt means nothing. Just like Apple’s debt doesn’t either.

    Apple has net cash on the balance sheet by a ton. Hasn't had net debt since 2002.

  • derrybderryb Posts: 36,016 ✭✭✭✭✭

    @GoldFinger1969 said:
    More nonsense marketing. They cherry-picked the time frame by starting from a once-in-a-generation low of 1970 which can never be repeated or even approximated.

    Not cherry picking, simply starting at gold's free market pricing. If you don't know the significance that 1971 has on the price of gold maybe you should not be discussing the price of gold.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • derrybderryb Posts: 36,016 ✭✭✭✭✭

    @Applejacks said:
    US debt means nothing. Just like Apple’s debt doesn’t either.

    The amount of US debt means everything when trying to borrow more. Seems the FED is the only willing party these days to further invest in what appears to be a sinking ship.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @derryb said:

    @GoldFinger1969 said:
    More nonsense marketing. They cherry-picked the time frame by starting from a once-in-a-generation low of 1970 which can never be repeated or even approximated.

    Not cherry picking, simply starting at gold's free market pricing. If you don't know the significance that 1971 has on the price of gold maybe you should not be discussing the price of gold.

    The price was artificially suppressed for decades which means starting in 1970 or 1971 is going to give you a huge boost. The chart and comparision are bogus. And I'm pro-gold.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @derryb said:

    @Applejacks said:
    US debt means nothing. Just like Apple’s debt doesn’t either.

    The amount of US debt means everything when trying to borrow more. Seems the FED is the only willing party these days to further invest in what appears to be a sinking ship.

    Explain how the ship be sinking, Michael Ray Richardson. :)

    The days of ZIRP are over and yes, interest costs have jumped tremendously. This is true for every country.

    If you are predicting Armgadeddon, then tell us when it happens...what it looks like....and how to profit off it.

  • derrybderryb Posts: 36,016 ✭✭✭✭✭
    edited December 1, 2023 6:09PM

    @GoldFinger1969 said:

    @derryb said:

    @Applejacks said:
    US debt means nothing. Just like Apple’s debt doesn’t either.

    The amount of US debt means everything when trying to borrow more. Seems the FED is the only willing party these days to further invest in what appears to be a sinking ship.

    Explain how the ship be sinking, Michael Ray Richardson. :)

    The days of ZIRP are over and yes, interest costs have jumped tremendously. This is true for every country.

    High interest rates (hopefully temporarily) are one of our few hopes.

    If you are predicting Armgadeddon, then tell us when it happens...what it looks like....and how to profit off it.

    Financial Armageddon happens suddenly. You are seeing it approaching slowly. Profit? LOL. The smart ones will protect and keep their wealth with precious metals. Many here forget that gold is a store of value, not necessarily an investment with hopes of profit.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    You can't sell that stuff to potential investors and it won't make you any $$$ either.

    Greece took 30 years to implode. You won't see the U.S. get into that kind of trouble in your lifetime.

  • derrybderryb Posts: 36,016 ✭✭✭✭✭

    Well it is promising to hear the naysayers move on from "won't ever happen" to "won't happen in your lifetime." Those of us with children are also concerned about what happens after we are gone.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Out of control spending, record debt, the reversal of a 40 year trend in interest rates, unfunded liabilities up the wazoo, and interest-rate sensitive derivatives exposure into the quadrillions……what could possibly go wrong?

    It doesn’t take a rocket scientist to see that they want a controlled population via CBDC, guaranteed income, social credit scores and the ability to lock down the public at will. When all else fails, start another war. It’s either complete incompetence or malevolent planning.

    Or both.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • bidaskbidask Posts: 13,813 ✭✭✭✭✭

    Well here is an investment over 53 years that you can eat and grow.

    https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/stock-price-history

    The truth is quality stocks for the long run offset inflation.
    If you do not own quality stocks for long duration your missing out some serious growth of your nest egg.

    For you perma bears educate your self with Jeremy Siegel Stocks for the Long Run 6th edition:

    https://wsp.wharton.upenn.edu/book/stocks-for-the-long-run/

    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭

    @derryb said:
    Well it is promising to hear the naysayers move on from "won't ever happen" to "won't happen in your lifetime." Those of us with children are also concerned about what happens after we are gone.

    If it doesn't happen in the next 10 years, it's an uninvestable event.

    Do you intend to keep your money under a mattress and under canned goods and ammo as an investment ? :D

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭
    edited December 2, 2023 11:19AM

    @jmski52 said:
    Out of control spending, record debt, the reversal of a 40 year trend in interest rates, unfunded liabilities up the wazoo, and interest-rate sensitive derivatives exposure into the quadrillions……what could possibly go wrong?

    What could possibly GO RIGHT ? What if AI adds the expected 1-1.5% real GDP growth that some forecasters believe it can ?

    Do you know what that means to every naysayer and negative metric cited ? It's like winning Powerball and taking care of some car, home, and credit card debts. :D

    It doesn’t take a rocket scientist to see that they want a controlled population via CBDC, guaranteed income, social >credit scores and the ability to lock down the public at will. When all else fails, start another war. It’s either
    complete incompetence or malevolent planning. Or both.

    Or maybe just the progress of technology ? None of those are guaranteed to happen and nobody is championing them either. Stop with the conspiracy Area 51 nonsense. You're smarter than that.

  • derrybderryb Posts: 36,016 ✭✭✭✭✭

    @GoldFinger1969 said:

    @derryb said:
    Well it is promising to hear the naysayers move on from "won't ever happen" to "won't happen in your lifetime." Those of us with children are also concerned about what happens after we are gone.

    If it doesn't happen in the next 10 years, it's an uninvestable event.

    Do you intend to keep your money under a mattress and under canned goods and ammo as an investment ? :D

    I keep my cash in PMs. I keep my investments in other things. I keep ammo in the event both fail me.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    The bond market and the banks are in trouble and there’s no way to fix it other than high inflation and high taxes, or a complete re-set which won’t be pretty in any way.

    Stocks will crater when the bond market scam ends.

    You can pretend that the Fed isn’t buying bonds to artificially drive rates down temporarily in spite of monumental deficits (that would normally precipitate a bond market crash).

    You can ignore the reality that the Fed is buying large cap stocks to support the stock market with money created out of thin air to maintain the illusion that the economy is healthy.

    You can mock the idea of keeping money in a mattress or storing canned goods & ammo as a precaution against adversity as an Area 51 conspiracy all you want.

    That’s certainly your prerogative. I’m just trying to open your eyes and to help keep you from shooting yourself in the foot.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • blitzdudeblitzdude Posts: 5,283 ✭✭✭✭✭

    @jmski52 said:
    The bond market and the banks are in trouble and there’s no way to fix it other than high inflation and high taxes, or a complete re-set which won’t be pretty in any way.
    You can mock the idea of keeping money in a mattress or storing canned goods & ammo as a precaution against adversity as an Area 51 conspiracy all you want.

    You certainly don't live in the world that the rest of us do. The one known as reality.

    It's nice to step outside and let them rays from the sunshine down on your depressed grape. Holed up in that bunker is no way to live. It's beautiful BOOMIN world out here. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • GoldFinger1969GoldFinger1969 Posts: 1,161 ✭✭✭✭
    edited December 3, 2023 7:56AM

    @jmski52 said:
    The bond market and the banks are in trouble and there’s no way to fix it other than high inflation and high taxes, or a complete re-set which won’t be pretty in any way.

    3 banks went under, JM. 25% of the capital deficit has been fixed as time marched on closer to the maturities of the bond portfolios (in a few months, it will be 1 year since SVB failed) and rates declined 75 bp.

    A duration (interest rate) problem is not the same as a credit issue.

    Stocks will crater when the bond market scam ends.

    There is no scam in the bond market. So I guess stocks will never crater ? And why should they, when they aren't at bubble levels ?

    You can pretend that the Fed isn’t buying bonds to artificially drive rates down temporarily in spite of monumental deficits (that would normally precipitate a bond market crash).

    The Fed is selling bonds and reversing QE.

    You can ignore the reality that the Fed is buying large cap stocks to support the stock market with money created out of thin air to maintain the illusion that the economy is healthy.

    Sorry, they aren't. You're just making stuff up.

    You can mock the idea of keeping money in a mattress or storing canned goods & ammo as a precaution against adversity as an Area 51 conspiracy all you want.

    I'm joking and being facetious. Are YOU about the Fed buying large cap stocks ?

    That’s certainly your prerogative. I’m just trying to open your eyes and to help keep you from shooting yourself in the foot.

    I've followed the markets closely for 40 years. My eyes are WIDE open. :)

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