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Two Thoughts on the Market Action

06 Oct
wall street

Two Thoughts on the Market Action

Gold Market Discussion

The gold price spiked after a close, but brief, encounter with reality on Tuesday.  From a low of $1192, gold surged to a high of $1212, before coming to a close at $1207.

The price of silver popped, too, knocking on the door of $15 an ounce before closing at $14.69.

As always, the question is “what happened?”  It was something we had forewarned you about a couple of weeks ago.  The federal government’s accounting year, Fiscal Year 2018, ended on Sunday, September 30. 

national debt clock
The yesteryear debt of 9.2 trillion on the famous National Debt Clock in New York City doesn’t look so bad compared to today!

On Monday the truth was told:

The deficit for the year was over a trillion dollars, as we had warned.  Originally the FY2018 deficit was projected to total $526 billion.  We knew at the time that it would probably be twice that high… and even that fell short of the irresponsible spending reality.

The exact number for the year was an eye-popping $1,271,158,167,126.72.  The government had spent $1.27 trillion more money than it had taken in. 

In 12 months!

Let me put that in perspective. The entire federal debt did not reach $1 trillion until 1982.  I don’t mean the one-year spending deficit. I mean that the entire debt of the US government didn’t reach $1 trillion until 1982. 

The US fought for and gained its independence; it fought the British again; it completed the Louisiana Purchase, fought the Civil War, opened the West and expanded to the Pacific coast;  it fought War One, World War Two, the Korean War and the Vietnam War, and put a man on the moon.  And through all of that, the cumulative federal debt didn’t reach a trillion dollars. 

Until 1982.

But in the year just ended, the deficit was $1.27 trillion! 

For one year!

Maybe you see where this is going.

The total federal debt for the fiscal year skyrocketed to $21.5 trillion.  To be exact, $21,516,058,183,180.23. 

One of the news services figured out that the debt was equal to approximately $138,330 for every person in this country who works.

No wonder the gold market jumped!

But it didn’t take long for on Wall Street and in Washington to say, “If the people aren’t concerned with the debt we’re loading on them, why should we be?  If they don’t realize we’re going to print money and inflate away their earnings and savings, then let’s just keep the party going.” 

So, gold returned to its trading range around $1200. 

We have two thoughts about the turn of events.

First, we’re glad we still have some time to help our farsighted clients invest in gold before the price runs away.  We don’t know how long we have, but events are accelerating.  Please don’t wait until it is too late.

Watching Washington, a second thought occurs. It’s from Shakespeare:

“Lord, what fools these mortals be!”

We don’t know the dates and the times that these events will unfold, but they are underway now and they will accelerate as at first a few countries and then more diversify out of dollars and into gold.

We recommend you beat them to the punch by acquiring gold now, before the inevitable stampede.

As always, I encourage you to speak with your broker at RME for more market updates. Expert brokers are available Monday-Friday from 9 AM- 5 PM or by special appointment after hours. Call today at  602-955-6500 or toll-free at 877-354-4040.

“I’ll be keeping a sharp eye on the market and I encourage you to do the same!”