This has been a predictable eventuality for at least ten years. When a government is able to print money without cost, piggy-backing on the backs of other nations, it is guaranteed to do so until the situation changes.
Our debt is approaching or has possibly even surpassed the GDP. That's an important milestone that upsets a lot of people who made the mistake of trusting us. The risk of a credit downgrade was always there, and it should have been obvious to everyone a long time ago that the U.S. had no real motivation to do anything about the problem until the risk became real.
And it probably wouldn't do anything significant about the problem even then.
Ironically, gold is rocketing up right now - after an event that one could logically argue is a negative for gold! Doesn't it make sense that if we now know that further printing will lead to higher costs, there will finally be political pressure to halt the presses?
Yet, so mired are we in the belief that government spending cannot be cut that talk of doing what must be done does not cross anyone's mind as a serious possibility.
Not yet.
The dollar is backed by the 'full faith and credit of the United States.' That faith and credit is now beginning to slip, even among the general public. The implications for gold's price are glaringly obvious.
And you folks should all have seen this day coming years ago.
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