Many of us have played dominoes. No, not the regular one. The one where we position them close together and watch them tumble in a long line until none are left standing. The dollar at the end of this image of such a domino game is being significantly threatened by worldwide monetary manipulation. That's what the growing list of gold buyers think. They see all the dominoes falling and so they're taking steps to protect and preserve their wealth from what is happening.
The Federal Reserve’s Quantitative Easing strategy has kept interest rates low for several years now, making it cheaper to finance the huge and growing national debt. However, recently we’ve heard the predictions that rate increases are coming. Under current law, Congressional Budget Office projects that net interest costs will more than double over the next 10 years, soaring from $270 billion in 2017 to $712 billion in 2026 and totaling $4.8 trillion over the period. Think about that for a moment.
Monetary manipulation going on around the world includes:
- The central banks of Japan and European countries have been fighting failing economies. Japan approved in 2016 a $73 billion government stimulus package of new spending.
- Australia cut interest rates in mid-2016.
- England is expected to take actions to combat the effects of leaving the European Union.
No matter how enthusiastic business and a chunk of the public are about coming Trump Presidency tax cuts and stimulus measures, most economists (government included) admit that these actions will increase the deficit in the near term.
That’s the national debt clock number at the time this paragraph is being written. Congress has been kicking the can to future generations for many years. Much of this debt is owed to our own government agencies and the U.S. public. Notably, the Social Security Trust Fund is stuffed with IOUs.
By the way, just writing that last paragraph resulted in more than a $6 million dollar increase in the INTEREST on the debt!