From Birch Gold Group
Suspension on the U.S. debt ceiling is set to expire March 15, and two of Trump’s top advisors are going head-to-head over whether it should be raised. Markets are already nervous, and things could get ugly if a compromise isn’t reached.
Passing the $18 Trillion Buck
The U.S. debt ceiling is not directly tied to new spending. It’s the congressionally mandated limit on how much debt the country is allowed to have on its books.
By raising the ceiling, we’re simply keeping up with the burden of existing debt. It’s a way of saying, “Yes, the country can shoulder these obligations, and they will be repaid.”
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More of an accounting measure than anything else, the debt ceiling is the first line of defense in a short series of measures that prevent the U.S. from defaulting on its debt. If it isn’t managed and raised appropriately, serious consequences can occur, such as when the U.S. experienced its first credit downgrade after the debt ceiling crisis in 2011.
Raising the debt ceiling and “passing the buck” is a necessary evil, simply because failing to do so puts the country’s financial viability in serious danger.
Members of Congress and federal bureaucrats have always butted heads over the issue, but they’ve never been enough at odds to prevent an eventual resolution.
However, a stand-off between two of Trump’s new picks is causing some to worry this time may be different.
Mulvaney vs. Mnuchin
Steven Mnuchin, Trump’s pick for Treasury Secretary, is firmly committed to raising the debt ceiling as needed. But Trump’s pick for Budget Director, Mick Mulvaney, feels very differently.
“Honoring the U.S. debt is the most important thing. … I would like us to raise the debt ceiling sooner rather than later,” Mnuchin said during his Senate confirmation hearings.
Mnuchin sees the decision as a given. Without raising the ceiling, a mere crisis can quickly escalate to a major disaster.
Mulvaney, however, thinks there’s a false sense of urgency. And he thought the same thing before the 2011 debt ceiling fiasco too.
“I have heard people say that if we don’t do it it will be the end of the world … I have yet to meet someone who can articulate the negative consequences,” Mulvaney said in 2010.
Now Mnuchin and Mulvaney will be forced to hash it out – with themselves and with federal legislators. But they have less than a month to do it.
The Clock Is Running Out
If Mulvaney and Mnuchin can’t coordinate with Congress to reach some kind of deal before the current debt ceiling suspension expires next month, Americans will have good reason to be concerned for their financial security.
A drop in faith of the U.S.’s creditworthiness could trigger a domino effect with disastrous consequences – not just in the American economy, but in the entire global financial system. According to a report from the Bipartisan Policy Center, such an event would be particularly damaging to pensions, 401(k)s, IRAs, and other retirement accounts.
On the flip side, metals markets stand to reap significant benefit from the looming debt ceiling meltdown. During the last major debt ceiling crisis in 2011, gold prices exploded to over $1900.
While the government scrambles to cook its own books, do you really want to leave your savings fully exposed to any potential fallout? If you’re like many of Birch Gold’s clients and do NOT want to take such a chance, it may be wise to seek safety in gold now, before time runs out.
Birch Gold Group helps Americans protect their savings with physical gold and silver. Clients can purchase precious metals for physical possession, or move their IRA or 401(k) into a Precious Metals IRA. To learn more, request a free Info Kit on Gold – there is zero cost and zero obligation to you. All you need to do is enter your details at www.birchgold.com
Congress will raise the ceiling no matter what anyone in the Trump administration or Trump himself wants.
It’s the same Congress that did it last time, giving Obama even more than he asked for.
Trump’s going to do better at spending his efforts to cut spending than waste time and effort on the futility of trying to change this at this time.
Of course he can always veto it, but there is going to be so much essential spending and legislation tied to it that it will be self defeating to do so and whatever is presented next will be the same.
Shut is down, shut it all down. I would love to see Trump come on TV and tell the truth about all of this. The fact that every time they “raise the debt ceiling” it is just theft of your buying power with printed fiat. He should explain to the masses that it is like a whiskey shot glass that starts at one end of the bar with 100% Whiskey, and each time someone takes a drink, their share is made up with water. By the time it makes it to the of the bar (middle class), it is so watered down it does not buy anything. Lets see CONgress explain THAT to their constituents. Although, I know a libtard that with a straight face told me “there is no such thing as inflation”, so maybe even this analogy is too much for the ‘merican citizen to get….god help us.
I agree that raising the debt ceiling will eventually happen but getting there won’t be pretty or easy. It will require congressional approval and there are tons of republicans who have spent the last 8 years grandstanding over Obummer’s ever levitating ceiling votes. To now turn on their heels and allow more debt will take the guile of a snake or a senator (or do I repeat myself)? The dems will use the occasion to yank Trump through a knot hole. It promises to be a super shit storm. May give renewed meaning to the “Ides of March”.
Neither congress nor Trump has the balls to do what has to be done. They will just keep kicking the can.
Don’t hold your breath for anything different than what we usually get….which is SCREWED.
This article is nonsense. None of the debt will ever be repaid, and of course the debt ceiling will be raised. We will still be reading articles like this when the US Treasury debt hits $50 trillion, and the non-Treasury debt is another $30 trillion….
The time has come and gone for fiscal responsibility. The entitlement crowd is too big.
I wonder what this country would look like if we hadn’t given in to every war monger, welfare advocate, every special interest. Now we’ve grown those groups to monstrous proportions, all demanding to be fed. And this all, not with a fair debate over the use our own tax dollars, but instead we’ve taken the easy way, and immoral, and passed the costs on to the kids.
Karma’s going to be a killer when it finally catches up with us over this.
Hey underfire! “The time has come and gone for fiscal responsibility.”
Yeah… demanding fiscal responsibility now is like having a house that is already burning in every room, but demanding that we all learn to take fire safety seriously.
Maybe we can at least save the chimney.
Unknown authors tell us that you should be happy, don’t worry.
Increasing debt limits is normal and no matter for concern, just move along there is nothing to see.
I saw what happened in Rhodesia, in Mexico, in Venezuela. I own a ten trillion mark note from the Weimar period.
So all you folks sitting on a million dollars today can rest easy in knowing that someday, you can buy a newspaper with that million.
After all, this is normal and no cause for concern.
Now if you don’t own real assets you will be royally screwed up by the folks who tell you that debt is great.
We’re told credit creates debt which creates money. If all 3 can be created out of thin air then both money and debt can be vanished right back into the same thin air. Stamp out those billion dollar coins already !
If a 10 cent chunk of copper isn’t worth a billion dollars then explain how a wheelbarrow of paper is ?
The “ever so often” vote to lift the debt ceiling for the USA is simply a farce.
Of course it will be raised to enable the welfare/warfare state to continue operating.
After all, when the Feds needs to spend money, it merely has the Treasury issue umpty-ump trillions of Bills and bonds which is then bought by the Fed. Reserve which, in turn, issues credits to the Federal government to spend – having long ago been identified as a Ponzi Scheme.
Sooner or later, the dimmest of minds will figure out that circular method of finance is just bullshit squared based solely upon imagination and totally false reasoning. When that happens, the inflation rate goes through the roof, making it easy to pay off the debt with dollars worth only a fraction of what they were when the Ponzi Scheme was initially started.
In the mean time, those dollars, now worth perhaps only a thousandth of what they were “a while ago” has driven the general population into complete poverty and penury. (See Venezuela today!)..
The USA has a lot of FAIL built into it. But eventually fail it will.
muck