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<p>[QUOTE=&quot;Smitty, post: 1392560, member: 35044&quot;]That&#039;s what my view of precious metals all boils down to.</p><p><br /></p><p>U.S. non-discretionary spending (SS, Medicare, Medicaid, interest on the debt) is currently 86% of total tax revenues ... and growing. Military spending, even cut to the bone, would take up the rest. SS went into the red seven years before they said it would. The baby-boomer demographic will put increasing pressure on non-discretionary spending.</p><p><br /></p><p>Deficits are $1+ trillion per year.</p><p><br /></p><p>The next President and Congress will not address the problem in any significant manner. In fact, from what I&#039;m seeing, even their best policy proposals &quot;increase&quot; spending significantly.</p><p><br /></p><p>Even a small increase in the interest rate would have a devastating effect on the budget. A 5% increase (back to the &quot;normal&quot; rate of interest) will increase interest on the debt by almost $800 billion per year, or 27% of current tax revenues.</p><p><br /></p><p>There&#039;s no evidence that we can &quot;grow&quot; our way out of the problem. The earnings forecasts are a farce, 35% of the increase being attributed to &quot;currency revaluation.&quot; Europe is collapsing, China is slowing, Japan is stagnant, who exactly are these companies selling stuff to? I wouldn&#039;t doubt if most of the other 65% is accounting gimmickry, such as GM&#039;s stuffing of dealer channels to show sales that really aren&#039;t sales.</p><p><br /></p><p>What other outcome can be imagined besides &quot;printing&quot;?</p><p><br /></p><p>However, I do think we&#039;ll go through a period of crisis-invoked deflation before inflation.[/QUOTE]</p><p><br /></p>

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