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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (3575)	12/18/2003 5:36:54 AM
From: westpacific	Read Replies (2) of 110194

99% of Americans have no clue to the BIG PICTURE. And this is the BIG PICTURE: --- I had not thought about our perilous future for some time. But a question from a reader started me contemplating again the terrible dangers lurking up ahead because our government has spent the 20th century wallpapering the world with flim-flam dollars. He asked, "What likelihood was there that the U.S. and other foreign governments would sell off significant portions of their gold reserves in order to reduce their debt, should the price of gold become tempting enough to do so?" This would never happen, of course. America's current national debt is $6.9 trillion and its upcoming liabilities are approximately $44 trillion. So the $140 billion worth of gold in the U.S. Treasury's vault would be but a drop in the bucket in comparison. Even if gold would skyrocket to $3000 per ounce (which it could well do), it still would give us only $1 trillion to dispense toward $50 trillion in government debt. So selling off gold at higher prices would never be a workable solution to our catastrophic problems. But the governments of the West are definitely selling off portions of their gold -- just not to pay their debts. They are doing so to try and "manage" the price of gold for as long as they can. The Fed and the U.S. Treasury know that they have no chance of keeping gold under $400 per ounce while they devalue the dollar down into the 60's on the USDX charts. But they hope that through their secret machinations with the mega-bank cartel in New York, they can keep a slowly rising lid on the price of gold and prevent a price explosion that would set off a panic amidst the world's investors. This is of crucial importance, for such an unbridled explosion would send the bond vigilantes into overdrive. U.S. Treasuries would be cast over the rail like so much flotsam at sea. Interest rates would scream. The Dow would crash. Asians would head for the lifeboats. Arabs would demand Euros for their oil. America would cease to be a superpower. The economic meltdown would flatten the world's economies like flower gardens in a hurricane. 321gold.com WEST

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