Ready for the New Breed of Spenders?
Washington has seen its share of big spenders. Bush and Obama were among them. Trump was an even bigger spender.
But now, Washington is home to the biggest spenders of them all.
Even before Biden’s inauguration, his Treasury secretary nominee appeared before the Senate for confirmation. Janet Yellen uttered these words:
The people on Capitol Hill who should be keeping a brake on government spending have been missing in action for years. So now, when the biggest spenders ever show up muttering “go big,” the brakes are off entirely.
Before the current fiscal year got under way, the Congressional Budget Office estimated that the deficit would total $1.8 trillion. That was in September. Now, just a few months later the Committee for a Responsible Federal Budget estimates that it will total $2.3 trillion.
But the new bunch still intends to “go big.”
Going big means that even that $2.3 trillion guesstimate is low. We think the river of red ink will overflow the banks of last year’s $3.1 trillion deficit.
That means the national debt will be well over $30 trillion dollars. And that will happen just as foreigners are backing away from funding Uncle Sam’s debt habit.
Consider: After seven years of negotiations, China and the European Union have just announced a new “comprehensive” agreement on investment. The deal comes just as China has become the EU’s largest trading partner, surpassing EU trade with the US.
One thing is clear, with increasing EU-China trade and investment, there will be less demand for the US dollar as a middleman. That redundancy will strike right at the heart of the dollar’s reserve currency role. And that means a lower dollar and higher gold.
Still, no matter the dollar’s fate, the Biden-Harris bunch plan to be the biggest spenders ever. How will they manage to do so? By turning to the crackpot Modern Monetary Theory being pushed by persons of considerable influence with the Biden-Harris bunch. (We’re looking at you Alexandria Ocasio-Cortez and Elizabeth Warren.)
But for now, buy gold and silver to protect yourself from the madness of the biggest spenders ever.
And go big!