The International Forecaster | June 21, 2010
Bob Chapman
Note how gold explodes whenever the euro takes a dive. Those of you who think that the euro is going much lower in the near future had better think again. The explosion of gold whenever the euro goes down will alone give the Illuminati powerful reasons to support the euro, as will the potential for a devastating trade imbalance that will aggravate the US debt problem from a balance of payments perspective. Gold is now rising with the dollar because it is now competing with the dollar for safe-haven money, even when the stock markets are tanking. Gold will win this battle eventually once it is clear that the US economy is going to go under, and that event is not far off. Silver may catch up with gold based on the ridiculous gold to silver ratio alone, but could suffer if the stock market starts to tank, since the combined attack from J P Morgan Chase and the ensuing downward expectation for commodities demand could take their toll. Gold will continue strong in the current environment no matter what due to the unsolvable sovereign debt crises that have become evident around the world.
Remember what J P Morgan himself said: ”Gold is money, period.” And soon it will be the only money that has any value, period. Gold, silver and their related shares are the only place to be. Stay clear of paper gold and silver and buy physical only and take possession. These paper gold and silver Ponzi schemes, like GLD, SLV, OTC derivatives and mint certificates are going to be exposed soon. The Sprott Gold Bullion Fund is a viable possibility if you want to buy some paper gold, otherwise go physical only. Very shortly, JP Morgan will be sued in class actions by big players that have been criminally screwed in the silver markets, and this could be the catalyst that finally blows the whole precious metals fraud wide open. So load up! Don’t forget as well, for those who want inherent leverage, do not forget the gold and silver shares that is where the most money is made with moderate risk.
Let’s start with your annual letter from the commissioner of Social Security. It recaps your work record and projects your future retirement benefits. It also warns that benefit payments will exceed employment tax collections by 2016. Worse, it says the Social Security Trust Fund will be exhausted by 2037. When that happens, employment taxes will cover only 76 percent of promised benefits.
As it turns out, the letter is optimistic.
Benefit payments already exceed employment tax collections. According to the Congressional Budget Office, a crush of retirees and fewer workers has turned the expected surplus of employment taxes over benefit payments into a shortfall.
Fortunately, it’s estimated at only $29 billion this year, piffle in government finance. The piffle, however, is expected to continue. There will be a need to find cash, and we will be talking about it in 2012.
Some readers will say, “Gee, isn’t that what our Social Security Trust Fund is for?’’ It’s a reasonable, if naive, idea. While it is true that anyone who worked between 1983 and today has shoveled some extra money into the trust fund, it’s not sitting there like dollar bills in Scrooge McDuck’s vault. The trust is just a collection of IOUs from the Treasury.
In 1983, when Alan Greenspan led a commission that reformed Social Security, federal debt was only $1.4 trillion. Our reformed Social Security was supposed to be solvent for a full 75 years. Its accumulating surplus, held in trust, would cover the hefty cost of the baby boomers when they retired.
But the commission missed the mark. Today the unfunded liabilities of Social Security alone are $5.3 trillion. And the surplus is no more. Worse, Treasury debt is now $12.4 trillion which includes $2.3 trillion of IOUs held by the trust fund. So when Social Security goes to redeem its IOUs and cover that $29 billion shortfall, it will go to the Treasury. Sadly, the Treasury is empty except for its tax revenue and whatever it can borrow.
Full analysis HERE
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