$37 silver!

Since the shape/slope of the curve is what leaves the greatest impression on people, I can only assume that Kitco has some sort of agenda in drawing it in this manner. But everyone has to decide for themselves how accurate they want their data, so this is my last post on the chart.

 

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Cloudsweeper99, clearly you don't like what the data is showing you and so you want to manipulate it. But you cannot draw it in any way where the price is not growing exponentially without making time no longer a constant (e.g. a logarithmic chart). But that's just hiding the facts. There is no agenda in producing a chart of price vs time and fitting a curve that touches the top points and bottom points. It merely helps to visualize what's occurring. You have some kind of agenda in denying reality.

 

I agree, but my point is that if the interest rates were allowed to be set by the market, then the interest on the national debt would exceed federal income, thus making it impossible to pay. That's why the Fed absolutely must continue to manipulate the interest rates by monetizing the debt and giving the appearance that there's more demand than there truly is. Bernanke will drop money from helicopters if necessary. He has said so plainly.

 

I think it's less a matter of being able to pay the debt as it is the effects of increased credit costs at a time when the economy is still recuperating. Additionally, there's no political will for belt tightening during a political cycle...and these days we seem to be in a constant "political cycle".

 

It's both.

Bluesboy65

 

Thread needs renaming its $38 + at this time.

 

The chart below show the interest paid on State, Local, and Federal debt as a function of Gross Domestic Product. We're currently just over 3% and pundits suggest that 12% is the "Drop Dead" point. If interest rates increase from 3.5% to say...7%, that wouldn't be good, but it wouldn't put the government into receivership...not right away, at least.

We (the voters) DO need to start taking the debt seriously. It's time to begin prioritizing our spending; if childhood asthma research is more important than PBS, then PBS has to go...it's that simple. If you would rather watch Big Bird than Iraqi bombings on TV, you need to let your representatives know. If people are living longer, then 67 or 70 may not be an unreasonable age to begin drawing Social Security. In any event, the government spending shouldn't be used to bail people out of bad life decisions.

 

Do you have any links that talk about this particular level?

 

I don't know that bailing people out of bad life decisions is what has caused this problem. I think the government bailing corporations out of bad business decisions; and the government making bad war decisions has far more to do with it.

And there is a lot of harping about the spending, but it should be recognized that we are also dealing with a revenue problem. And giving the 2 percent hefty tax breaks when they don't need them doesn't help the issue much.

 

I agree there are plenty of spending cuts that can be made from ALL sectors of the budget. ...and I don't think it's right that GE earns $5 Billion and pays Zero (0) income tax just because they have the best lobbyists or happen to be "in bed" with the current Administration.

We need to replace the income tax with a national sales tax. This will take out the 23% penalty we place on our goods sold overseas and charge a National Sales tax on foreign goods sold in the US (as our goods are taxed in other countries). The National sales tax will ensure all corporations pay their fair share and criminals, tax cheats, and illegal aliens all pay their fair share.

Hmmm...what should we call it? How about "The FAIR Tax"?!

 

Here's an interesting article from Briefing.com that compares the US Debt situation to Greece. At the end of the article, they attribute the difference between Greece and the US to the fact that Greece is tied to the Euro and doesn't have the luxury to inflate its currency.

I saw reference to the 12% figure here...but I'm not sure where they got it. Here's an excerpt from the bottom of the page...

The Wikipedia article on US Public Debt is a sobering read.

It's amazing that the parties are quibbling over $30 Billion when the deficit (not the budget, mind you, but the DEFICIT...the part we have to finance) is $1500 Billion! ...but it's a PRIORITY that PBS funding isn't touched? :goof:...really?

Anyone that cares about this country HAS to be outraged! :heated:
I would rather live under a highway overpass than leave this mess to the next generation...WORD!

 

I don't have a degree in economics or any kind of college education for that matter. I do not see how the national debt problem can be fixed, without a crash. The way I see it, the stimulous-buyout package just prolonged the inevitable.

Most American households do not have any kind of savings, most live paycheck to paycheck and acquiring debt. About 4 times a month I hear about home sales increasing, but everyday I see just as many forclosures in the local paper.

I read somewhere that the 14 trillion divided up among all US citizens is 3333 per citizen. If everyone wrote a check to the US treasury, we could buy our way out of this mess.

Here's the deal, I have a family of 5, so I would fork over $16,665. If I gave up a few vices I could swing it, but I don't know of any friends that could. I guess they could get a loan, LOL.

Face it we are SCREWED and gold and silver will continue to rise until that bubble bursts and the next hot thing will be firearms and bottled water.

 

It doesn't take a college degree to see that. It takes a college degree to rationalize it away!

It's much worse than that!

$14,274,101,000,000 / 311,105,983 U.S. citizens = $45,881
$14,274,101,000,000 / 111,132,659 U.S. taxpayers = $128,442

And if you add in the unfunded liabilities (SS, Medicare, etc)...

$113,250,375,000,000 / 111,132,659 U.S. taxpayers = $1,019,055

Do you have a million bucks laying around? I don't. Not even if I give up a few vices.

 

Yeah, I'm not sure how they got that either. But it's surely in the neighborhood.

$14,274,101,000,000 * 0.12 = $1,712,892,120,000

Federal revenue for 2011 is estimated at $2,174,000,000,000, which is just $461 billion more than the annual interest at 12%, meaning there's only $461 billion remaining to run government even though we currently spend $3,819 billion. It's certainly possible that the bond markets would balk at that point or even earlier. But we don't exceed revenue until 15.23%. However, that figure will continue decreasing as the debt increases. Next year the debt will be about $16 trillion, so it will only require a 13.65% interest rate to match revenue. In 2013, the 12% figure will exceed revenue. By 2015, at the pace of deficits we're on, a 9% interest rate on the national debt would exceed federal revenue. Considering the prime rate went above 20% in 1980 and didn't fall under 10% until '85, I would say the government debt problem is intractable. That's why sovereign debt generally goes into crisis at only 90% of GDP, which we have exceeded already merely because we're the world's only superpower and issuer of the reserve currency, which gains us a tiny bit more credibility (unjustly in my opinion). I see no way out except through monetization and hyperinflation.

 

Well I don't usually toot my own horn, but this prediction was right on. If you took my advice, you might have earned 80% returns today on AEM May $70 call options or 50% on KGC Jan '12 $22.50 call options or 15% on SLW Jun $35 call options like I did. I reaffirm the rest of my prediction and guidance above and will be selling a little bit on the way up and then selling quite a bit in the $1550+ gold range and $45+ silver range, with the intention of buying again when they retreat to their trend lines sometime this summer.

 

Well, with this I think you go wrong. It should be obvious that defunding PBS won't even make a scratch. But, the Republicans are grandstanding on PBS to detract from the real elephant in the room: Defense and tax cuts to the very, very wealthy. John Boehner denies that there is any sort of revenue problem; it's all a spending problem.

When you shift the focus from solving the budget/deficit and instead focus on ideological pet peeves you are not going to accomplish anything.

 

Well 2005 level federal spending was somewhere close to $2.5 Trillion, and just six years later we are up to $3.7 Trillion .... Me thinks we have a SPENDING problem. I think we were living pretty well in '05 --- so how in the world can we be spending another $1.2 trillion more in a few short years?
SPENDING is the key .... Lower it or we are headed for default!

 

Okay. Spending close to $3.7 Trillion makes you think we have a spending problem. That's good.

"In August 2010, the Congressional Budget Office (CBO) estimated that extending the tax cuts for the 2011-2020 time period would add $3.3 trillion to the national debt, comprising $2.65 trillion in foregone tax revenue plus another $0.66 trillion for interest and debt service costs"

http://en.wikipedia.org/wiki/Bush_tax_cuts

3.3 trillion is lost revenue. How is that helping our situation?

Now, what is NPR costing?

Elephant/mouse. Which do you focus on?

 

Well if you think that Tax money is the governments money in the first place, then "extending tax CUTS" could be seen as the problem, OR you could realize that the MORE you are taxed the LESS free you really are ....
How about the federal government does what it was created to do instead of becoming more and more a Part of our lives ....

Maybe the problem with NPR is: taxpayers money is furthering a liberal agenda? Regardless of cost, why does it have to be so biased when it is supposed to be a station for all the people, not just the left.

 

With taxes, I buy civilization. I consider it an excellent investment.

As has been said so often, if you think taxation is evil, don't be a hypocrite. Stay off the Internet, stay off the roads, don't eat food that's been inspected for safety, and... well, that whole "provide for the common defense" thing is really kind of hard to opt out of, so I'm not sure how to suggest you clear your conscience there. The traditional refrain in the '60's was "America, love it or leave it"; perhaps it's time.