Ron Paul was on CNBC Squawk Box yesterday and stated that the United States will eventually face the same type of problems that Greece is facing now, although it will be magnitudes worse. The saving grace for the United States at the moment is that the dollar and treasuries are still trusted, but this will come to an end due the enormous debt and deficits that America faces. Dr. Paul commented that politicians will remain unwilling to cut spending or debts and will instead resort to more dollar printing and inflation. Furthermore, we will not be able to grow our way out of the mess because the growth in GDP is artificial, much like the growth in the money supply.
“It is absolutely bizarre! Never in the history of the world has any one single bank been given the power to create the reserve currency of the world out of thin air.”
The only silver lining that I can see is that the American people are starting to wake up and realize that the Fed is the culprit. While it is only a one-time audit, the Senate recently unanimously approved a bill to audit the Fed, a move which would have seemed impossible just a few years ago. It may be too little too late to save the current system, but I would argue that we need an entirely new system anyway. As difficult as the transition is surely going be, it may be the tough medicine that is needed in order to create a new sustainable system that is not so easily corrupted.
In the meantime, continue to accumulate gold and silver as it seems more likely each day that the metals will reach some of those price predictions previously thought to be crazy. I would not be the least bit surprised to see gold at $5,000 per ounce and silver above $100 per ounce in the next few years.
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