Gold hit an all-time high this week—again. The yellow metal briefly topped $1,500 an ounce before falling back down a few dollars. The world has become increasing nervous about the size of the growing U.S. debt. Just this week, America’s debt topped $14.3 trillion (also an all-time high) which is close to the limit Congress can legally borrow. A recent CNSNews.com report shows why the $38 billion, that was just cut, is a drop in the budgetary bucket. The report said, “Friday’s $34.54-billion jump in the national debt almost equaled the $38.5 billion the Republican House leadership said would be cut from spending for the remainder of this fiscal year by the continuing resolution that the Congress passed on Thursday and President Obama signed Friday. The federal government is now perilously close to hitting its legal limit on debt.” (Click here for the complete CNSNews.com story.) Odds are the debt ceiling will be raised by more than $1 trillion. Meanwhile, the Fed is printing more than $75 billion a month to finance 70% of the U.S. budget. The math of this screams currency crisis 2011! Even key members of the Fed are openly worried about America’s sea of red ink. A few weeks ago, Dallas Federal Reserve Bank President Richard Fisher said, “If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when . . . I look at this as a tipping point.” (Click here to read the complete story from CNBC.) Mr. Fisher said we are just at the beginning of correcting our budget problems and “it’s going to be very painful.” What do you bet “painful” will mean forced budget cuts and high inflation.
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