“Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth… The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation” ― Alan Greenspan – Before selling out to the vested interests
“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” – Alan Greenspan – After selling out to the vested interests
Do you think the debt ceiling will be raised in the next few weeks? Do you think the national debt will reach $20 trillion by the end of Obama’s term? If you answer yes to those questions, then why would you hesitate to buy gold at $1,300 an ounce today? Greenspan was correct on both of his statements. The United States will print as much money as it takes to make its debt payments, thereby debasing the value of those dollars and making gold more valuable in relation to those debased dollars. It really is that simple.
This chart shows the near-perfect correlation between the price of gold and US Public Debt. Despite the current rumblings, everyone is aware that the debt ceiling will be raised and will likely surpass $20 trillion by the end of President Obama’s term. That would put the price of gold at about $2,000 per ounce.