So do we buy Banana Republic paper or something with demand?
With $12T in debt, growing to $16T by some estimates, one only has to look at the following clock to realize they're out of control: http://www.usdebtclock.org/
So, when we look at the US Govt's "balance sheet" and if we hypothetically stopped ALL federal spending (except mandatory interest payments) for the next 50 yrs, we still couldn't pay down the nation's debt. Each of us (the taxpayers) now owe $111,039 --- please get your checkbooks out.
The other little dynamic many of you have probably seen is how the White House and the Hill no longer talk in terms of a "balanced budget" (those words have officially left Webster's Dictionary) and only talk in terms of the "deficit as a percentage of GDP" (until the earth cools, apparently).
With just $300B (actually $11B because of the way the USG values it) in gold reserves, we're as close to Banana Republic status as any county I study.
Add in the facts that 95% of these gold reserves are "short"/loaned out, and that Big Ben's balance sheet has exploded lately, you quickly realize we're on an even slipperier slope than most believe. I'm not in the doomsday camp, but have you seen how precipitiously our tax revenues are falling??? (this year won't even match 2006's)
I staying long as hell gold -----just went through the Tresury Dept's TICS database and it's clear to me nations are now starting to go OUTBOUND on our debt ---the Japanese (second largest holder of our debt) are in the early stages of saying Sayonara Uncle Sam. The Chinese (largest holder) are trending in the exact same direction.