Gold, Currency IOUs And Inflation

By Gary Christenson – Re-Blogged From Gold Eagle

The financial world runs on “funny money” or debt based currencies. More currency = more debt. How much debt? In a word – “unimaginable.” But another important word we should consider is “unsustainable.” WHY?

The world abandoned gold backing and replaced it with debt based currencies. Those dollar bills, yen, euros etc. are DEBTS issued by your central bank. They are as valuable as… someone believes they are. Unlike gold or silver coins, they have no intrinsic value.

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A Pound of Cure

By Peter Schiff – Re-Blogged From Euro Pacific Capital

This week, as investors and economists fixate on record highs set by major stock market indices, they have ignored much more significant developments that emerged from the Federal Reserve’s annual meeting in Jackson Hole, Wyoming. Fed Chairman Jerome Powell delivered a speech that somehow was almost universally interpreted as a reiteration of his commitment to continue to raise rates throughout the next few years. “Steady as she goes” was the takeaway from just about any news outlet. But the Chairman’s actual message was essentially the opposite of what the media reported. From my perspective, it provided evidence that President Trump has succeeded in getting Powell’s mind right on the need for the Fed to continue to stimulate the economy, no matter how much evidence emerges that it is already over-stimulated.

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Federal Deficits Are Worse Than You Think

By Mark Brandly – Re-Blogged From Silver Phoenix

New Age Fiscal Stimulus Is Unprecedented

By John Rubino – Re-Blogged From Dollar Collapse

In a normal business cycle, the economy expands for a while and businesses hire lots of new people at somewhat higher wages, generating enough tax revenue to shrink the government’s budget deficit – and in rare cases produce a surplus. So, for a while, the government borrows less money.

Not this time. The current recovery is nearly ten years old and the labor market is so tight that desperate companies are trying all kinds of new tricks to attract workers – including higher wages.

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Is The Interest Rate Death Spiral Finally Starting?

By John Rubino – Re-Blogged From Dollar Collapse

The yield on Italy’s 10-year bond is up by about 100 basis points from its 2018 low. Meanwhile, its government continues to borrow money and roll over its existing debt. But now it has to do so at ever-higher interest rates, which means it has to pay more interest, which means its deficits are rising, forcing it to borrow even more money, and so on until this “interest rate death spiral” becomes fatal.

It would already be fatal, if not for the European Central Bank’s willingness to buy Italy’s bonds at extremely favorable prices (i.e., very low interest rates). But now the ECB is promising to stop doing that, which leaves Italy in the early stages of a very negative feedback loop.

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Spending Our Way to a Fiscal Crisis

By Ron Paul – Re-Blogged From Freedom Outpost

According to financial writer Simon Black, the federal government is spending approximately 52,000 dollars per second. This, not last year’s tax cuts, is the reason why the national debt has reached a record 21 trillion dollars, which is more than America’s gross domestic product (GDP).

Another ominous sign is that this year both Social Security and Medicare will have to draw down on their reserve funds to be able to pay benefits. The Social Security and Medicare trust funds will both soon be bankrupt, putting additional strains on the federal budget and American taxpayers.

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Big Debt-Fueled GDP Number For The 2nd Quarter

By Michael Snyder – Re-Blogged From Freedom Outpost

What kind of number for GDP growth in the 2nd quarter will we get on Friday? The market consensus is somewhere around 4 percent, but there are many out there that are expecting a number above 5 percent. The last time we witnessed such a number was during the third quarter of 2014 when the U.S. economy grew by 5.2 percent. If Friday’s GDP figure is better than that, it will be the best report that we have had since 2003. But let’s keep things in perspective. In seven of the last 10 years, GDP growth was much lower than anticipated in the first quarter and much higher than anticipated in the second quarter. It looks like that pattern may play out again in 2018, and analysts are already warning us to expect a much lower number for the third quarter.

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