Stocks, Gold and America's New Crisis Economy

by Lear Capital EditorialMarch 14, 2013
printed money puzzle

How about those stocks? There's no doubt that if you're in the market right now you've experienced some growth. That's good for your portfolio and good for the dollar. But investing is about cause, effect and timing ... and soaring stocks have opened up opportunities for gold and silver that we have not seen in several years.

Perhaps the most compelling aspect of precious metals is that they cannot be printed or manipulated by any government. They cannot be devalued by policy, pumped up by political agenda, or thrust into volatility by social unrest. They are time-proven investments that have been part of wealth building strategies for generations. If you've never found the opportunity to acquire the world's money ... now is a very good one.

We know stocks have hit record highs, and gold and silver have dropped in price. But, something else has become very clear ... we are living in a crisis economy. The White House has gone on record stating that "the Debt Crisis is not immediate," but when America's Debt is the largest in the modern world for any one country and our interest payments alone are roughly $1 Billion dollars per day, I am not sure what part of that is not pressing.

We started 2013 by barely escaping the tumultuous Fiscal Cliff and in the two months since then we have raised the Debt Ceiling once and enacted Sequestration cuts. In just two weeks from now we must confront the Continuing Resolution and a potential government shut down. Beyond that looms a mine field of monetary mayhem with another Debt Ceiling deadline in May and reaching the inconceivable $17 Trillion dollar US Debt benchmark, which we should hit sometime this summer.

The President recently said that he would not "chase a balanced budget simply for the sake of balance." With Republican's staunchly opposed to further deficit spending and the fiscal banter on Capitol Hill seemingly miles apart ... there seems no middle ground and little room for compromise. A stalemate in the Congress and the Senate translates to more funding emergencies. So it appears that "fiscal crisis" will be the new American norm for the foreseeable future.

Just yesterday, President Obama said that our Debt is in a "sustainable place for the next ten years." America's outstanding National Public Debt is projected to hit $26 Trillion by 2023. Ironically, the American monetary system has always operated under the popular premise that it is "too big to fail." That notion may well have "sustained us" through our recent history of unchecked spending but make no mistake ... Debt changes everything.

When the markets are manic, diversifying with assets that have proven themselves over time is critical. So as the Dow soars to new daily highs, it's important to be prepared and vested to survive and thrive in our new crisis economy which will continue to impact us in the next few weeks, throughout the summer, through next fiscal year, and over the next decade.

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