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National Debt Poses a Threat to National Security

In this article, the author discusses the concerning issue of the United States' national debt, which Congress has recently acknowledged as a threat to national security. The Senate unanimously approved a resolution labeling the $34.6 trillion national debt as "a threat to the national security of the United States" and calling the expected future budget deficits "unsustainable, irresponsible, and dangerous." Despite this acknowledgment, it remains uncertain whether Congress will take substantial action to address the problem.

The Congressional Budget Office (CBO) released a report showing that annual budget deficits are expected to increase significantly in the coming decades, leading to a national debt projected to reach $114 trillion by 2054. This growing debt is expected to slow economic growth, drive up interest payments, heighten the risk of a fiscal crisis, and make the nation's fiscal position more vulnerable to increases in interest rates. Interest payments on the debt are already surpassing the Pentagon's budget and are projected to become the largest line item in the federal budget by 2051.

The article also points out that there is a lack of political will to address the problem, with lawmakers reluctant to propose solutions that might involve tax increases or cuts to entitlement programs. The situation is further complicated by the fact that the CBO's projections do not account for unforeseen events such as recessions, natural disasters, or wars, which could further exacerbate the debt crisis. Read More.

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The Looming Gold Shortage That's Flying Under the Radar

Alasdair MacLeod, a former bank director, shared his insights on the ongoing banking crisis with Liberty and Finance. He believes the crisis is a top-down issue starting from central banks, which lack both liquidity and accountability. MacLeod argues that central banks are not just diversifying their holdings but are actively getting rid of paper currency by purchasing gold. He suggests that this is a response to the unsustainable debt levels, particularly in the U.S., where the federal government's debt is expected to reach $40 trillion by 2025.

MacLeod points out that governments are printing trillions annually to support their economies, leading to inevitable inflation and higher interest rates. Despite the rise in gold prices over the last three years, he believes that the market is not yet in a bull phase, as global savings are significantly underweight in gold. He suggests that if portfolios were to adjust even to a modest 2% allocation in gold, it would require an enormous amount of physical gold, far exceeding current supplies.

The article also mentions forecasts by Goldman Sachs and TDS, predicting gold prices to reach $2,175 and $2,200, respectively, in the near future. MacLeod's analysis implies that as global savings start diversifying into gold, the price of gold could rise rapidly and significantly. Read More.