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Gold and Silver’s Role in the Coming Debt Crisis – Will the Dollar Survive?

By:
Peter Ginelli
Published: Mar 9, 2021, 15:36 GMT+00:00

In 1976 when Jimmy Carter was elected president, the US national debt stood at $628 Billion. That’s Billion with a B, mind you. Five years later, on October 22, 1981, during President Reagan's first term, the US National Debt had crossed the $1 Trillion milestone for the first time in our history.

US Dollar Index

As the chart below shows, 37 years and 5 presidents later (George H.W. Bush, Clinton, George W Bush, Obama, Trump), our national debt has multiplied by over 28 times, standing today at over $28 Trillion.

Think about that for a minute. Each second our national debt grows by $52000 which is more than what an average American earns in an entire year. During the 30 seconds, since you began reading this article, our national debt grew by over $1.5 million.

The more disturbing fact is that each and every one of those 5 presidents made campaign promises to reduce spending and the national debt, and yet, here we are with a staggering $28 Trillion in debt, with no end in sight. This week President Biden is expected to sign yet another stimulus package, passed by the democratic house and senate worth $1.9 Trillion which will take our national debt to $30 trillion virtually overnight.

For those of you complaining about liberal tax-and-spend presidents putting us where we are today, let me assure you, this is not a conservative or liberal issue, it is an American issue. In fact only 16 of those 40 years the White House was occupied by democratic presidents (8 years Clinton, and 8 years Obama) while the other 24 years it was occupied by 4 Republican presidents, Reagan (8 years), Bush 1 (4 years), Bush 2 (8 years) and Trump (4 years).

During Trump’s first 3 years of presidency, before the Covid-19 pandemic began which resulted in massive stimulus spending, the national debt had already grown by $3 trillion. Then as the pandemic hit the nation, the massive stimulus spending jumped by another $4 trillion, taking our debt up to where it is now at $28 trillion.

And that is not even the worst of it. What many forget is that our debt is growing at a warp speed, while the interest rates are at historic lows. At some point the FED would have to normalize rates, and when they finally do, our debt will begin to skyrocket even faster to unfathomable levels.

So why am I throwing these numbers at you? It is not to depress you or singing doom and gloom, it is merely to open your eyes as to where we are in our current fiscal mess that our so called leaders have put us in. So stop listening to politicians telling you how great things are and how we have nothing to worry about. As the old saying goes, numbers don’t lie, people, or more pointedly, politicians do.

The US Dollar’s status as the global reserve currency has never been in doubt at any point since its inception more than it is today as more and more countries around the world have begun to question its viability in recent years.

Point being is, will the dollar survive the coming debt crisis? This is no longer a matter of ‘if’ but ‘when’?! We have long past the ‘if’ folks after our national debt surpassed our GDP! Now all we have to worry about is ‘when’, and what role will gold and silver play as we approach that inevitable outcome!?

In case you don’t know what debt to GDP ratio means, let me simplify it for you. Imagine you make $5000 a month in income and yet to pay your monthly expenses, mortgage/rent, food, gas, utilities and other expenses, you need $7000. So, to continue to pay your bills, you start borrowing from your credit cards $2000 a month. This continues on month after month, till at some point your debt surpassed your annual income.

You earn $60,000 a year, but your debt is at over $140,000 with no end in sight as you continue to live beyond your means and continue to ask the credit card companies to raise your credit limit. Then at some point the credit card companies look at your irresponsible spending and staggering debt and decide to cut you off from any additional spending on their dime. Now your only option is bankruptcy.

That is where our country is headed today. The United States’ debt to GDP ratio currently stands at 120%. We spend nearly 20% more than we make in annual income, and it is just a matter of time before those who lend us money to survive, decide to cut us off at the knee by not lending us any additional money. On that day, dollar will literally crash and its role as the global reserve currency will end as people and nations lose their confidence in our currency and we will officially be in a crisis like never in our history before!

You don’t have to look any further than the 1940’s Germany or today’s Venezuela to see what a currency collapse looks like. In both those instances, the only people who survived the crisis, were and are those who saw the coming crisis before it arrived and prepared by turning their hard-earned money to precious metals. Indeed, gold and silver have outlived every currency known to man and every currency known to man has crashed at one time or another due to irresponsible government leaders. That is a fact no one can dispute.

In the end I will leave you with one last thought. Ask yourself this question: do you trust politicians enough to bet your entire life savings that they will do the right thing and stop the coming dollar crisis? If your answer is yes, then I have a beautiful bridge in New York to sell you, if not, then you may want to prepare yourself from this inevitable fast-approaching debt crisis and currency collapse by converting your hard-earned money to gold and silver, the most reliable, time-tested hard currencies known to man, before it’s too late.

With each passing day, we are getting one day closer to this crisis. Can you afford to sit by and let it destroy your life saving and standard of living as the printing machines keep flooding the world with dollars.

About the Author

Peter Ginellicontributor

Peter has been actively involved in market research and analysis for over a decade. His opinions are based on extensive research from various sources including the latest world geopolitical and geo-economics events and best available information and data available.

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