Now that Dallas has removed its infamous statue of General Lee, we can safely assume that everyone's going to be better off and a brave new world of tolerance, diversity and equal opportunity can begin now that institutional racism is finally erased from our parks. But not so fast, readers.
In your excitement over statues you may not have noticed that we're $20 trillion in debt and climbing at a rate of around $1.1 trillion a year. That's something like $34,880 a second or if you picture it in terms of the speed of sound, which is 1,125 feet per second, our debt is flying at over Mach 30. Eat your heart out, Chuck Yeager.
This means that the US is hurtling towards bankruptcy at hypersonic speed and looking somewhere down the pike at a Grecian-style sovereign debt crisis. So how do you resolve a >104% debt to GDP ratio, with a $19 trillion economy and a $20 trillion debt overhang?
Through tax cuts and economic boosting? Good call but not enough. You solve the problem by devaluing the dollar, by inflation.
Jim Rickards, at Zerohedge, suggests this can be done by the Treasury inflating the price of gold, from around $1,330 an ounce to $5,000 through the use of a Gold Certificate issued to the Fed. It's been done before, in 1934 and 1953, under the Roosevelt and Eisenhower administrations respectively. And sure enough, inflation ensued.
Problem? Solution, except that your dollars will be sadly worthless. Of course there's another option which perhaps goes hand in hand with the first, war.
Midas Touch,
LSP
