Any thoughts on if the debt limit isn't increased?

Wow...we could go on and on as who is to blame. I prefer to keep discussions on coins, precious metals, etc,and not the politics involved ...as I am really disappointed in both parties...well, I won't go there.

However, I'd like to now your thoughts on how this may play out...do you think investing in gold and silver is a good idea now? I think it is.

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Permalink Reply by Craig Thomas on July 13, 2011 at 12:26am

They will come up with a deal...becasue the consequences are to dire if they don't. But the world demand for silver and gold will continue to grow. There will be some corrections, but if you are patient, you will do fine. I bought a FS Julia Grant this week and expect my three ASE's to be delivered Friday. But I collect because I love coins, and will contiue to do so as long as I can afford too. I hope they increase in value, but that for me is secondary. I do think that the FS series has potential to be produce very nice returns do to the low mintages. If you really are looking for "value", then bullion is the way to go.

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Permalink Reply by Buffalo on July 13, 2011 at 1:07am

I think the debt limit will be increased, but for a smaller amount than some wanted, and the amount of deficit reductions will probably be a lot less than the $4T over 10 years number that was being kicked around. None of it gives any long term solutions, debt will still continue to pile up. But I do think many in Washington are underestimating the amount of support for not raising the debt limit and allowing some type of default. In one survey I saw recently 37% of respondents held that view. Overall I think it most likely will be raised in time for the legislation to be written and passed before Aug 2nd, but I would not say it's a done deal and both sides may move to positions that lose rank and file support within their parties. A last minute surprise in the House and/or Senate is maybe unlikely but not out of the question.

I still think silver and gold are good investments. Short term, if the US does raise the limit I think the steadily worsening situation in Europe will be a bigger factor, It will probably push gold and the dollar both higher, short term silver gains could be pretty much offset in dollar terms by the higher dollar value itself. Longer term, what has changed in the "big picture" that has been driving increases for years? Not much that I can see, more of the same with a few variations so I think PM's keep going higher. I think gold will hit $1800 by the end of 2012, silver back above $50 and possibly quite a bit more.

It really is hard to discuss a lot of these things without any reference to politics since that is one of the major factors driving events and the people in our government sure don't leave it out. The specific amount of the debt limit increase that everyone wanted being chosen because that is how much borrowing Geithner said it would take to get through the 2012 elctions is proof of that.

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Permalink Reply by Bruce Wiseley on July 13, 2011 at 6:32am

You're correct Buffalo, every discussion always comes back to politics, because the Government is trying to get their hands into everyone's pockets. They attempted to control and tax our coin and bullion collections; we now have to use those ugly, mercury filled light bulbs; they accused Glen Beck of being in bed with Goldline, even though when Beck started to advertize for them, gold was at $800 an ounce!, gee was that bad advice? Now Obama stated yesterday, that if the debt ceiling isn't raised, people's SS checks won't be sent out in August. Of course, that's an outright lie, because those checks are not tied to the debt ceiling, by law, so the politics is invading everything we do. Like many collectors, I love coins, and if I make a few bucks, GREAT, but since I have collected for my kids and grandkids, what increase in value occurs will be irrelevent, because I will be pushing daiseys, lol!

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Permalink Reply by Indentured Servant on July 13, 2011 at 7:58am

To answer your post title.........I wish they would not increase the debt limit a single penny. However the bentral bamkers will not allow that. My theory is that the sooner we hit rock bottom (B'rock O'bottom?) the sooner we can get things turned around. But no, it will continue to be a long slow descent into hell. At the end of the day the effects will be exactly the same whether it happens slow or fast. Everything the central bank and govt is currently doing simply delays the inevitable. Perhaps a long slow slide into hell is better than an abrupt drop. It would give people a chance to "get used to the new normal" so to speak. I sincerely believe there are bright people with good ideas on turning the situation around but we are years or even a lifetime away from those ideas seeing the light of day mainly because no intelligent person with an ounce of self respect would subject themselves to the circus otherwise known as the media and political system. Fifty years ago yes but now? Not a chance in hell! Having said that, I sincerely hope with every fiber of my being that I am wrong. I'll do f&@king back flips out of sheer joy if I'm wrong!

You asked "do you think investing in gold and silver is a good idea now?" Investing in PM's was a good idea seven years ago. It was a good idea when silver was at $47, $48 & $49 and it is still a great idea today.

Bill

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Permalink Reply by Indentured Servant on July 13, 2011 at 8:44am

Apologies for my atrocious spelling. I'm at work, running on little sleep and mountain of work almost as big as the debt to finish! I lack discipline!

Bill

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Permalink Reply by Buffalo on July 13, 2011 at 12:25pm

Maybe not exactly the same, but I think the ongoing situation in Europe should provide a lesson to the people running the show here. Debt issues cannot be resolved by more and more debt. A once-unthinkable default in Greece is now being openly discussed despite the huge amount of money and denials of reality from the EU, IMF, ECB, and government officials. For all of the talk of preventing contagion to other countries, that obviously hasn't happened either. Whether we want to face it or not we are on the same path and we are just pushing an inevitable day of reckoning further down the road. Personally I hope I'm wrong also, but it seems to me the most likely end game will be some type of collapse in the dollar or our ability to borrow more of them. At that point I think most of our options will disappear very quickly, and very likely without much warning at all.

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Permalink Reply by Indentured Servant on July 13, 2011 at 3:09pm

Here ya go: http://www.theburningplatform.com/?p=18397

Bill

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Permalink Reply by Steve on July 13, 2011 at 7:33pm

That's good Bill...very funny & informative too. Thanks

Indentured Servant said:

Here ya go: http://www.theburningplatform.com/?p=18397

Bill

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Permalink Reply by Indentured Servant on July 13, 2011 at 7:55pm

I enjoy differing points of view on these subjects so I'd be interested to know why you think it would not be exactly the same. To be fair I'll elaborate on what I meant.

Whether it happens slow of fast I believe the dollar will collapse, we will default on a large part of the debt we owe, energy will become several orders of magnitude more expensive for the rest of our lives and the "Good 'ol USA" will suck hind teat on the world stage for at least three generations.

With that in mind I see a near total end to all entitlement/social programs in the USA. I doubt that it will or can happen quickly and that will only add to the years of misery we will all endure. One day the printing presses, both mechanical and digital will stop. That is written in stone! When that happens you will eventually find yourself more worried about where your next meal will come from and how to obtain it without getting killed than you will be worried about your next SS check or food stamps.

There is a great blog done by a guy who is still enduring the economic collapse of Argentina in 2001. He wrote a great essay about the slow descent of their currency collapse. It's is very interesting to contrast your own ideas of what would be essential in such a situation with reality as seen through his eyes. He recently gave an interview to Chris Martenson who is another guy will clear, concise info about our monetary and energy issues. You can read his essay here and link to his daily blog from there as well.

I welcome all comments and most especially those who can provide links to unbiased info that runs contrary to my beliefs. I also wish that I could spend more time debating these issues but for better or worse, my job takes 14-16 hours of my day, sleep another 5-8 with precious little left for my wife or self. My life seems to be flying by and moving at a crawl simultaneously. Still, things could be worse. I do stop in here nearly every day to read the newest posts.

Bill

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Permalink Reply by Buffalo on July 14, 2011 at 2:49pm

Statements by Moody's, Standard & Poor's, Geithner, Bernanke, and others are piling on the pressure to reach a deal, yet Cantor asserts that the other side has systematically reduced the amounts of cuts on the table day by day and that Obama abruptly walked out on an acrimonious meeting yesterday, quoted as having said "“he ‘had sat here long enough, and that no other president — Ronald Reagan wouldn’t sit here like this.’” Reminds me of the White House response to an invitation to meet with rank and file Republican members of Congress regarding these issues, where it was reportedly declined as "a conversation not worth having." Given the fact that many of these people were elected on views that mean they won't always fall in line with the party leadership's wishes, I simply don't understand that response.

I have my opinions of Obama's leadership that I won't go into here and now (and I'm sure everyone else here does also), but these kind of things seem counterproductive to me. Whatever agreements can be reached will only come about by consensus, leadership involves listening to the other side and finding common ground, not refusing to listen to whatever you don't want to hear.