T Nation

Do Not Read, At Your Own Risk


"When a country's public debt exceeds 90% of GDP, that is the magic number. You get to 90%, there is no way back, and that is the number that the U.S. is going through pretty much as we speak. It is also the number which the UK has gone through; all of the PIGS are going through it, as well. They are all going past the 90% debt to GDP ratio. Obviously, Japan is miles past it already. It's up to 200%+. There does not appear, in the historical analysis, to be any great likelihood of getting back from that level of debt safely. There is this strong evidence that above 90% debt to GDP, you will experience either a cataclysmic default or some form of very serious inflation."

So observes Paul Tustain, gold market analyst and founder of BullionVault. In his view, gold serves as a beacon who's price is currently signalling the monetary system is in grave danger. He and Chris Martenson discuss the primary factors driving the price of gold and smart strategies for investors looking to build or maintain their holdings of the metal."


I know there will be dipshits who will see this and say (1) He's pimping a product. (2) Just another gold bug.

How about arguing with THE HISTORICAL RECORD instead? No country at this level of debt EVER escaped dire circumstances...ever.

No country since Spain under Phillip II EVER incurred a debt level like we have. And Spain went into a 300 year decline, followed by a fascist revolution.


Its Obama's fault obviously...


â??The so-called â??surprisesâ?? of history have emerged not because other countries did not have information, but because they refused to believe it.â?? (pg 919) Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (1966)


Obama's just the latest symptom.


I have a question which I've tried to sort out. Is our NET debt actually at around 80% or just our gross debt to those whom we owe to?

Remind me if I'm wrong:

GDP is about 14 trillion
Gross Debt is about 11
Net Debt is about 8
Budget is about 4
Annual defecit is about 500 billion?


A similar dipshit might first avoid referencing a source with an obvious bias and perhaps seek a source free of such appearances. Then one could avoid the above peremptory plea to discuss the topic, and not first stumble upon the obvious. One might also conclude, that by quoting a biased source, you seek to be provocative, and are not really interested in the merits of any discussion.


Let's put our thinking caps... anyone who was in agreement with Tustain's analysis would want be in the gold business for exactly that reason. So it's not exactly reasonable to demand a source who is bullish on gold, but for avoids buying it himself.


Was that English? LOL

Say that to me again...slow.

How about a fucking analysis of the issue? To buy or not to buy gold is not the issue. So why is it that we have a gold reference? What about a plain ol fucking economist with some fucking letters behind his name?


Here's my take on Gold.

Ads say it has grown so much, and yet they say that it has "never been more affordable"

That's an oxymoron. If it is affordable, it hasn't grown. And why would so many people be trying to sell it if it was so great?

Gold is ONLY a good investment in 2 cases:

1) You time out things, buy it, get a short term boon and get rid of it and
2) You expect the dollar to basically loose it. If everything else collapses, Gold picks up ALL or most of the lost value. If a system has 1 billion units of dollars and 1000 units of Gold, and the dollars loose all value, suddenly the Gold picks up the 1000 units of Gold claim all or most of that value, but if that happens, honestly, nobodyzgonna own anything anymore.

or if you think its pretty.


Bubbles never burst


There is a LOT of talk about a Gold bubble. My Ex was hot and heavy for silver as it not only has many industrial applications, but also its production which used to outpace demand by 6 months or more has shortenned to 3 days. (Thus any fluctuation in production is likely to produce an immediate spike in value)

We cashed in an older Roth IRA and bought a bunch just before the divorce. Guess who got every ounce... :frowning:

News Letters like Wall Street Underground etc. have been warning of similar economic decline and 'insoluble debt' for decades. It's hard for most people to listen to that noise over the sound of the home theater system they bought on 18% interest unsecured credit.

Monkey see, monkey do. A lot of American families carry 50%+ of their annual income in unsecured debt.


We were well over 100% debt to GDP in the 1940's.