Uncle Sam’s scam

With the population of the United States at 316,968,354 and each citizen’s share of debt over $54,000, it is inconceivable that the national debt will ever be paid back. I forecast that the debt burden will continue to grow as the U.S. economy continues trending downward. There is no recovery. Economic conditions continue to worsen, most new jobs are temporary and most full- or part-time new jobs don’t pay a living wage. Simultaneously, the nation’s labor force participation rate keeps shrinking. The further the economy declines — and with fewer people participating in the workforce — the lower the tax revenues the government collects and the less money it has to service the debt. As interest rates rise, it will cost governments, business and consumers even more to service that debt. Thus, with interest rates at historic lows and now slowly moving higher, there is additional downward pressure on the already-weak economy as the cost of borrowing further stifles growth. This is clearly evidenced by job losses and slowdowns in the real estate and retail sectors. Long term, the dollar will continue its decline as the world’s reserve currency. Unprecedented Federal Reserve cheap money policies that pump endless trillions into the economy in an abortive effort to revive faltering growth, boost the GDP and bring down unemployment will ultimately devalue the currency. Therefore, I stand by my forecast of gold reaching $2,000 an ounce. While there may be temporary pullbacks on gold prices, I estimate downside risk to be between $100 to $150 per ounce from its current price. I forecast the long-term upside potential to be well beyond my $2,000 mark. And, as I have repeatedly said, “Gold is for my Golden Years.”

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