The U.S. Dollar

The True Size Of The U.S. National Debt, Including Unfunded Liabilities, Is 222 Trillion Dollars

The United States is on a path to financial ruin, and everyone can see what is happening, but nobody can seem to come up with a way to stop it.  According to the U.S. Treasury, the federal government is currently 22 trillion dollars in debt, and that represents the single largest debt in the history of the planet.  Over the past decade, we have been adding to that debt at a rate of about 1.1 trillion dollars a year, and we will add more than a trillion dollars to that total once again this year.  But when you add in our unfunded liabilities, our long-term financial outlook as a nation looks downright apocalyptic.  According to Boston University economics professor Laurence Kotlikoff, the U.S. is currently facing 200 trillion dollars in unfunded liabilities, and when you add that number to our 22 trillion dollar debt, you get a grand total of 222 trillion dollars. (Read More...)

10 Quotes From Financial Experts About The Effect That QE3 Will Have On Gold And Silver

Do you want to know what QE3 is going to do to the price of gold and the price of silver?  Well, you can read what the financial experts are saying below, but it doesn’t take a genius to figure out what is likely to happen.  During QE3, the Federal Reserve will be introducing 40 billion new dollars that have been created out of nothing into the financial system each month.  So there will be more dollars chasing roughly the same number of goods and services, and that means that more inflation is on the way.  In an inflationary environment, investors tend to flock to hard assets such as gold and silver.  And it is important to remember that a lot of the money from QE1 and QE2 ended up pumping up the prices of various financial assets.  This included commodities such as gold and silver.  The same thing is likely to happen again with QE3.  In addition, investors now have an expectation that the Fed will continue printing money for the foreseeable future and that the U.S. dollar is going to steadily decline, and that expectation will also likely give further momentum to the upward movement of gold and silver.  Of course when it comes to investing, there is never a “sure thing” and as the global financial system falls apart in the coming years we are likely to see wild swings in the financial markets.  So there is definitely an opportunity when it comes to gold and silver, but anyone that wants to invest in gold and silver needs to be ready for a wild ride. (Read More...)

10 Shocking Quotes About What QE3 Is Going To Do To America

Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish.  The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity.  But that didn’t happen with either QE1 or QE2.  Both times the banks just sat on most of the extra money.  As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves.  So will pumping them up with more cash suddenly make them decide to start lending?  Of course not.  In addition, QE3 is not likely to produce many additional jobs.  As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2.  So why will this time be different?  But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets.  So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise.  But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis.  The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar.  Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency.  If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before.  The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term.  Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. (Read More...)