Beware of the coming economic debt bomb

TheStreet/Peter Tanous/5-9-2018

“The primary reason the Fed kept interest rates low was to avert an economic catastrophe. Today, that catastrophe can no longer be avoided. The trigger for the economic explosion is the rising interest payments on the federal debt.”

MK note:  We last dug into the complexities of the national debt and its impact on the overall economy in the November, 2017 edition of News & Views and came to the same conclusions as Mr. Tanous.  Tanous recommends gold ownership as a means to hedging the potential problems associated with the enormous U.S. national debt.  The conclusion of the November News & Views was that the national debt has made gold a superstar since 1971.  “As for the future,” we concluded:  “we should keep in mind that the very same conditions which created the long-term secular trend for both the national debt and gold are still in place today – nothing has changed fundamentally. As long as that is the case, we can assume gold will continue to attract capital as a long-term portfolio hedge just as it has, to varying degrees, through the first 46 years of the fiat money system. Please note, too, that gold is trading below the federal debt’s trend line, an indication that it might have some catching up to do in the months and years ahead.”

 

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