On October 19, Congress averted a shutdown at the last minute by voting once again to raise the debt ceiling. This has already happened numerous times over the years, 78 times since 1960, to be exact. Each time the debt ceiling is raised, more money is allowed to be borrowed into existence. The US federal debt is about to hit $29 Trillion and with Biden's trillion dollar infrastructure bill on the menu, the federal debt will surpass 30 trillion should it pass the senate.
Personally, I don't see how borrowing more money can solve any problems. It only kicks the debt can further down the road. Eventually, sooner or later, there will come a day of reckoning for those who borrow themselves into oblivion. As for the US government, that day of reckoning may come much sooner than most people realize. In fact, most people are oblivious to the mounting debt pile.
While the debt ceiling was allowed to be raised once again in October, it was just enough to last until... wait for it... December 3.
The US government could come to a hard stop on this date if the debt ceiling is not raised again. Dem majority leader Chuck Schumer and others have been pushing to remove the debt ceiling altogether but so far have been unsuccessful, thankfully. If the debt ceiling were removed, borrowing would go to the moon. The impact on the dollar would be devastating, not to mention the already fragile economy of not just the USA but the entire world. If King Dollar goes down, so do all the currencies of the world.
A quick history lesson on Weimar Germany of the 1920's shows exactly what will happen. After WW1, Germany was broke and forced to pay reparations. Their 'solution' was to print their way out of debt but what transpired ended in the complete destruction of their currency. At the very beginning of their hyper-inflation event in June 1921, once ounce of gold cost about 50 German marks. By July, 1924 that same ounce of gold cost a trillion marks. At that point, Germany was in total collapse and the societal fabric completely broke down. This led to the rise of ultra-nationalism, Adolph Hitler and the Nationalist Socialists.
December 3 is also the date when government contractors begin to renew their contracts. Rising transportation costs alone means increasing the dollar value of these contracts which traditionally are fixed. It could mean that contractors may find themselves with added costs they will not be able to cover without a significant increase in payout. We can only wait to see how that transpires next month.
Clearly, the solution is austerity via government downsizing but fat chance of that happening. As of writing, we are only 8 days away from a US government shutdown. More and more people are waking up, realizing that unlimited borrowing destroys wealth. The last decade has seen a rise in cryptocurrencies, led by Bitcoin and Etherium, a clear sign that investors are losing confidence in the dollar and other currencies.
It's likely we will have a US gov shutdown for Christmas this year and this should be a wake up call to everyone with half a brain. It would be wise to protect your assets by diversifying into precious metals, cryptos, real estate and even foods, as in canned / dry goods. Even investing in a few bottles of liquor and wines is a good idea. With inflation running around 15%, you can expect your favorite whiskey to shoot up in price, if it hasn't already.
My followers know that I'm a huge fan of silver, the so-called poor man's metal. According to USDebtClock.org, accounting for inflation, silver should be at about $3,086. As of this morning, the spot price is a paltry $23.58 and if that doesn't raise an eye brow, nothing will. In 1980, silver hit a high of $50. In 2011, silver almost broke its old high when it peaked at $49.50 but when you account for inflation, $50 in 1980 is about $169 today so the 2011 peak didn't come close to breaking the old high. Silver would have to surpass $170 in today's money to break the 1980 high and it could happen soon with the looming government shutdown.
(Spot silver graph - used with permission courtesy of www.kitco.com)
Expect to see this date, Dec. 3 popping up on all the mainstream news outlets over the next few days as it becomes apparent the US government is in serious trouble.
UPDATE DEC. 2: House Dems to send spending bill to senate to avert shutdown... until Frebruary! They will likely vote tonight. https://www.zerohedge.com/political/house-reaches-deal-avoid-government-shutdown-till-february
Update DEC.10: Shutdown averted (AGAIN!). Look for another bullshit sandwich next February when they have to do this all over again.
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