Record High Gold? - Not!
As is my wont, I peruse the financial channels in the morning to see what's going on around the world.Today is especially interesting as gold prices have broken out to record highs - at least according to some.My opinion is different.I believe gold prices still have a long way to go to match record highs.
Considering inflation and dollar debasement since January 21, 1980, gold is still half the price or less of what it was at that time.In 1980 you could still buy a fully loaded Monte Carlo for $8,000.Given that standard, gold should already be $3200 an ounce or better.
As I watched this morning, one expert was asked, why is gold rising today?He said, "I don't know."I think his name was Rip Van Winkle.Where have you been man?
With more stimulus on the way, debt still soars and with unemployment still raging, stories of recovery are still fairy tales as there seems to be no cure for the plague of the jobless.And, raising tax rates on the wealthy cannot possibly bring in enough tax revenue to matter.Do the math!!!
According to touted numbers, a tax increase on just the wealthy will affect only 3% of the workers.With a work force now shrunk to some 135 million, that's 4 million workers who can expect a tax increase.If you raise taxes on each of those workers by $10,000 per year, you only increase tax revenue by $400 billion in 10 years.
In Obama's recent speech he said
, "What I've got is the Republicans holding middle-class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost, over the course of 10 years, $700 billion -- and that, economists say, is probably the worst way to stimulate the economy."
Here's my take.We are only talking about 4 million people to begin with.Even if we believe each one of them is a millionaire and that each will benefit to the tune of $100,000 if we extend tax cuts over 10 years, how does it cost all of us $700 billion over 10 years in lost tax revenue when that number only collects $400 billion in additional taxes?
There are two points to be made here.First, when the math doesn't add up it's because the plan isn't valid.Secondly, considering the correct math, $400 billion of added tax revenue over the next 10 years is a spit in the bucket.That means everyone has to pay more taxes.Including the 49% who currently pay zero Federal Income Taxes.
Make no mistake, the middle class is going to have to pony up.Whether it be through new taxes on energy, the elimination of deductions like the home mortgage interest deduction, higher health care costs or the robbing effects inflation will have on our retirement accounts, the middle class will pay more taxes.
Now, does anyone still wonder why gold prices are on the move - as they have been for the last 9 years?Gold demand is soaring . . . period!You can ignore it, you can believe the talking heads who say it's in a bubble and you can find solace in words of comfort that just don't add up.What you can't do, however, is fail to act.
There are many arguments where the math adds up to higher gold prices ahead.Don't be afraid to add a gold coin to your retirement accounts or even a few American Silver Eagle Coins.And by all means do not buy into the story that gold is at all-time highs.Any way you cut it the math doesn't support the conclusion.
Is real record high gold ahead?Stay in tune.Visit LearCapital.com for breaking news, real time prices, low online prices for gold and silver and a variety of free reports that can put you on top of the story every day.
I agree with you as to why gold is shining and why it will continue to do so, as long as the FED keeps the printing presses running full speed, gold and silver will rise.The Dems had their big chance and they didn't waste it, they've spent our country into bankruptcy.How long before other countries dump the US dollar and start the death spiral is anyone's guess, but they have to be getting edgy when Congress is bouncing checks to the tune of 10% of the GDP annually!