USA Government In Shambles

By: Elizabeth Kraus

We’ve got a whole ocean of storms brewing globally, not to mention how it’s flaring the shores of mighty Mother of exiles, while she watches with silent lips, as America proposes to diminish her significance as well. Just as the US government tries to pull out of its debt hole, to fix the government’s spiraling federal budget deficit, a fight on Capitol Hill has become—not about money, but political power.

When President Obama was Senator Obama in 2006 and had addressed Congress with the following: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Governments reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that the buck stops here. Instead, Washington is shifting the burden of bad choices today on to the backs of our children and grandchildren. America has a debt problem and a failure of leadership. American’s deserve better.” Well, America, may we suggest the leader of this country read his own words again!

On the topic of historic activity, playing emotions on people for political power, like “shifting the burden of bad choices today,” lets take a moment as to why, the single asset to save one’s investment is suddenly attracting great emotions from governments, banks, stock markets, investors and down right to the individual. According to Regal Assets top analyst lately, Gold seems to bring out the extremes in traders, reporters, and governments. It’s either hated or cherished. One is able to call it a commodity, a barbarous relic, money or perhaps a wealth preserver. Whatever title one employs, somebody will react. As being a metal, it’s got certain qualities that other metals do not have, but that’s not what creates these reactions. It’s not even its price rise over the last ten years that causes the clamor. In fact, it’s not about gold at all. Government authorities have in turn cherished it, hated it and now are starting to adore it once more. It is what it is purported to signify that causes all the fuss. When you look at the factors as to why it’s increasing in cost, you get the picture. Why would anyone prefer to own a currency that ultimately represents a service economy led by cowboy central bankers when they can own one that is also a hard asset with great historical value? Gold is the one thing the government cannot touch, nor take away from the future of children.

Gold has defied many sound technical analysts forecasts as of late, and continues to do so. By pricing worldwide trade in the dollar, the business gained in U.S. banks from foreign international trade has become huge. All of the benefits of being the world’s superpower accrue towards the nation dominating the world’s global reserve currency that is, until international trust is lost in that nation and an additional superpower rises to share and eventually take on that crown of strength. In the past that place has been the topic of wars, but in today’s globe the battleground is about economic financial power.

Remarkably, in the first 100 days of 2011, we’ve observed the effectiveness of governments melting. We’re not just referring to these within the Middle East, but towards the collapse or emasculation of governments within the developed world. The U.S. and also the U.K. have governments that are now only capable of functioning properly when problems agreed by both sides come to the fore. Citizens are appalled once they see their leaders unable to concur on crucial issues such as reining in extreme spending as well as debt growth.

The last forty years has been an extraordinary experiment with man made money made feasible only by lulling people into acceptance via economic growth. Without growth that path to rejection will be a short one. Since 2007 we have started down that street. Yet, it is still not too late to protect assets from inflation and dollar devaluation, in addition to economic, financial, political, and geographical turmoil. Hitting a series of record highs this week due to a weaker dollar (The dollar index, which measures the greenback against a basket of other international currencies, fell to a 16-month low on Friday) shows us that the combination of inflation worries and geopolitical turmoil have weighed on investor confidence to move toward the safekeeping of gold and silver.

Gold is seen by many investors as the best place to park money when the economic or political outlook is uncertain. And given the meager yields on U.S. Treasury bonds, also considered a safe haven, there is little competition for gold.

Looking ahead, investors expect the gold rally to continue for the next few months as the market grapples with multiple uncertainties. “I think we’ll continue to see record highs over the next month or two,” said Carlos Sanchez, precious metals analyst New York-based specialty commodities firm CPM Group. Sanchez said $1,500 an ounce is the next target level for many gold traders, adding that prices could hit $1,550 an ounce if the momentum accelerates over the next few months. Over the long term, though, the trend is still higher for gold, according to Sanchez.

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