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Rubicon Minerals Corporation Message Board

  • rkymtgeo rkymtgeo Oct 31, 2013 11:17 AM Flag

    National Debt & Inflation vs gold price

    The USA's debt passed $17 trillion recently and will be over $20 trillion by the end of Obama's 2nd term. Interest on this at 1% is $200 billion per year while at 5% it is $1 trillion per year.....
    It is obvious that our government cannot allow any inflation as a huge % of the governments expenditures would have to go to pay the interest..... also social security payments would rise dramatically..
    You say no big deal.... which it may or may not be. To those that invest in gold and gold stocks it is a big deal as the end result is that gold and its price will likely remain subdued because of this. It is very likely that gold will move lower to the $1,100/oz range or perhaps as low as $990/oz in the not too distant future.
    This likelihood is known to the various banks and financiers that could loan money to mining companies that are trying to raise funds for mine construction.... Not a good scenario for the ability of these companies to borrow funds....

    RkyMtGeo

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    • But hey rkymt... he has a MANDATE... which imo in his mind means the opposition needs to roll over and play dead so he gets whatever he wants. The next 4 years he doesn't get to blame Bush (though I'm sure he'll find a way to do that) for the cost of wars in Iraq and Afghanistan being the reason for this mess. I honestly don't think he cares one bit about the debt /potential default implications his gigantic government is good philosophy causes.

      • 1 Reply to mries2002
      • So, what would so-called conservatives propose? They got no game when it comes to healthcare. They got no game when it comes to immigration reform. What game do they have? What are the concrete proposals from the right? Basically, the right's policy is what I have seen characterized as repeal and cackle. I don't know if it's true but I've seen statistics that say that food stamps cost the taxpayers on average about $36 dollars per year per taxpayer but corporate subsidies cost on average around $870 per year per taxpayer.

        I'll believe conservatives are serious when they start leading with their chin and propose doing away with corporate subsidies first.

    • Good to see that I got a rating of 4 thumbs down and none up for this post. It did spark some intelligent (for the most part) discussion on this board which is a rarity..... but should be the goal of all posts on this board - intelligent discussion in a civil manner.
      By the way, the $20 trillion in debt by the end of Obama's 2nd term is my number.... it is not a certainty, but highly probable unless you believe the economy is going to do much better on a short term basis...

      RkyMtGeo

    • "The USA's debt passed $17 trillion recently and will be over $20 trillion by the end of Obama's 2nd term. Interest on this at 1% is $200 billion per year while at 5% it is $1 trillion per year....."

      Estimated by the CBO that the run up bond yields, from the infamous "Taper speech" until the close to 3% yield on the 10 year, added about 30B in interest to the national debt for the last fiscal year.

      "It is obvious that our government cannot allow any inflation as a huge % of the governments expenditures would have to go to pay the interest...."

      Thus, the Fed finds itself where it is. Tiger by the tail. Hold on and continue QE with stable rates, stock market wealth effect, and monetized pension funds or let go and be eaten by higher yields. Rising rates are an eventuality, I believe. When? Don't know.

      I do know that paying interest on the national debt with rising interest rates will be like running up the down escalator. CBO projects a 4-5% yield on the 10 year about 2017. 3.25% on all interest bearing instruments at a total deficit of 19T is over 600 billion .... a year. 2% GDP growth is not enough to slow down the elevator.

      How will the Fed put a square peg in a round hole? They round the square end.

      Jane, stop this crazy thing.

    • The full effects of Obamacare will begin to take effect in 2014. The annual deficit will then begin it climb back over the trillion mark. By 2105 we should be approaching at least 1.5 trillion. 20 trillion looks very achievable by the end of Obamas second term..

    • "The USA's debt passed $17 trillion recently and will be over $20 trillion by the end of Obama's 2nd term."

      Just another example of right wing Fox news BS!
      For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.
      The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit. The national debt will NOT be over $20 trillion by the end of Obama's 2nd term.
      The reason that the deficits were so high in the first four years of President Obama's presidency is because we were in a very deep recession and Tax revenue had been drastically reduced, in part by that same recession and also by the Bush era tax cuts that the Republicans fought tooth and nail to keep in place..
      Strictly speaking, the two big tax cuts during the Bush years are estimated to total about $1.5 trillion, But many continued into the early years of the Obama presidency, and in December he cut a deal with Republicans to extend them even more, which brings us to $2.8 trillion. (In case you are wondering, the cost of the Iraq and Afghanistan wars was $1.26 trillion through 2011 and the Medicare prescription drug program totaled $272 billion.)

      Sentiment: Strong Buy

      • 3 Replies to dddurbin123
      • Triple d....The deficit was narrowed by eliminating the bush tax reduction and the government has been collecting the dollars basically unencumbered for the most part of the year...They've been spending the dollars trying to prop up the economy...January first is coming quickly now and the revenue they've been booking and spending will now have to be given back to its rightful owners, the people in tax returns...Increased revenue's (taxation) hasn't really increased as wages have fallen so next year the #$%$ hits the fan as their plan fails...Redistribution has never worked...

      • ddd, I think there is a good chance that the debt will be 20 trillion plus by the end of the second term (it's already way more than that if unfunded liabilities were to be counted) but I also think blaming it on Obama is a bit of purposeful obfuscation that ranks way up there. This die was cast long, long ago I think. And the blame has to be shared equally between those non-conservative conservatives on the "right" and those non liberal liberals on the left.

        This die was cast when politicians discovered they could bribe people with their own money and that's something both sides are about as equally likely to do, they just differ in the sub populations to which they want the loot to flow (after their cut is deducted of course).

      • Leave it to ddddddddurbin for his miss-the point response to this post regarding the national debt and inflation and how this might impact miners ability to obtain financing. Once again he turns the ssubject into a diatribe about how all this nation financial woes are a product of the Bush administration.

    • IMO, you have this backwards.

      Sentiment: Strong Buy

    • Maybe GG will cosign the loan.

    • Not a good scenario for the ability of these companies to borrow funds....

      No matter how you slice the pie there is no good scenario for Rby. They are backed in the corner. They know it too and that is why there is so much silence. Much of it is the fault of management but some of it is just pure bad luck,. Certainly management had little control over the poor outlook for gold. However management could have floated 100 million shares of stock when they got funds the last time and raised $400 million rather than lead stockholders to think they had the needed funds with a 30% contingency built in. Had this been done right then they would not be looking for additional financing in the near future.

 
RBY
1.41+0.02(+1.44%)Aug 29 4:00 PMEDT

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