Dear PGM Capital Blog readers
Today, September 2nd 2012, the USA Debt has reached an all time high of USD 16 Trillion as can be seen from the image here above.
With a population of approx 313,428,000 people it means that the USA National debt is approx. USD 51,047 per citizen.
With a GDP per Capita of apprrox USD 48,200.00, it means that currently the USA National Dept per capita is currently 105%.
It is worth mentioning that this debt excludes off-balance sheet unfunded liabilities, for medical, social-securities and other entitlement programs.
Before continuing reading this article, we suggest you to take a minute of silence to reflect on the meaning and implication of the above-mentioned data.
From this chart below you can see how the USA National debt has developed since 1940.
As can be seen from below pie-chart, approx 47% of this debt is held by foreign Investors.
Here below you can see a breakdown of the major foreign holders of USA-Debt.
With the USA FED monatizing this debt it is not a question if, but when these foreign holders of the USA Debt Securities will lose their confidence in the USD and its Debt-Securities and subsequently start dumping them.
The fact that CHINA, RUSSIA and the mayor Oil Exporting Countries are increasing their gold reserves is an indication that the position of the US-Dollar as a world currency is poised to lose its prominent position.
With an increasing budget and fiscal deficit, sooner, much sooner than many people believe, we’ll see a burst of the Treasury market and a massive flight into the safe haven of Gold, Silver and other precious metals.
We therefore we advise investors and the middle class to exchange their paper or fiat-money for Real Money: Gold, Silver, and other precious metals, before it is too late.
Last but not least, before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities, Precious metals as well as the stocks of their producers can be very volatile and that sharp corrections may happen in the short term.
Yours Sincerely,
Eric Panneflek
Scary stuff!The question is indeed how long this can continue. I refuse to believe that the holders of US treasury bonds will continue to hold, let alone buy additional treasuries. It looks like an exercise in futility. How in heaven’s name can Uncle Sam ever HOPE to pay back all this money! It only takes one, seemingly, irrelevant event to cause a stampede, which obliterate the US$. It can be a bank defaulting on its clients, or it can be the medicare defaulting on payment for the medical services the doctors perform (and believe me, the medical profession is being milked for every penny, causing 60% of these professionals to be extremely dissatisfied with their work), or any other small thing that may be illustrative of the bigger picture, and you’ll have the house come crashing down on everyone! Yes, the future for the USA does look grim! Man the boats, my friends, and do take your bags of gold & precious metals with you.