|
Tuesday, March 9, 2010 |
|
| - By John March |
As if there weren't enough reasons to invest in dealer gold and other precious metals, a recent report from the Congressional Budget Office is warning that the U.S. could be poised to go into even more debt in the coming months than previously expected.
According to the CBO, preliminary analysis of President Barack Obama's budget proposal finds an alarming upswing in both the national debt and the annual federal budget deficit.
For example, the plan would raise the national debt from $7.5 trillion at the end of 2009 to $20.3 trillion by the end of 2020. Under this projection, in 2020, the debt held by the U.S. public would amount to 90 percent of the nation's gross domestic product.
Perhaps more alarming from an investment standpoint, this projected increase would also likely result in higher borrowing costs that would further consume government resources from year to year, largely just to pay interest in the growing national debt.
In the shorter term, the CBO envisions a budget deficit of $1.5 trillion in 2010 and $1.3 trillion in 2011. The 2010 deficit would amount to 10.3 percent of the nation's gross domestic product, compared to the 9.9 percent that was seen in 2009.
The CBO figures also paint a darker picture for efforts to cut the federal deficit than current White House projections do. In fact, the CBO report noted that its projected deficit for 2011 is $75 billion higher than that anticipated by the White House, and $1.2 trillion higher than White House figures for the period falling between 2011 and 2020.
Earlier this year, the president announced the creation of a commission to examine ways to bring down the national debt, to be led by former White House Chief of Staff John Podesta, a Democrat, and former Republican Senator Alan Simpson. However, fiscal hawks have been dismayed to learn that the committee's recommendations will be non-binding, meaning that Congress will be free to ignore them.
While in the short term it is unlikely that lawmakers will muster the political will needed to make tough and potentially unpopular decisions about the budget deficit, the issue has at least been receiving some additional attention from various media outlets.
Still, whether this will spur the momentum needed to eventually tackle the problem remains to be seen. With that in mind, consulting with a silver and gold dealer about investing in precious metals may be one way to guard against potential economic setbacks involving an out of control U.S. debt.
John March is the Chief Technical Officer for the Superior Gold Group, his financial insights on precious metals are sought after by Gold & Silver Dealers globally.
If you have any questions about how to buy gold coins, and want to learn how to grow your portfolio call 888.374.4032 or write to askjohn@gold101.com.
 |
|
|
