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National Review/Brien Reidl/7-28-2020
“The unlikelihood of a quick economic recovery and the additional relief legislation sure to come out of Congress should together push the deficit to roughly $4 trillion in 2020 and ensure that it averages $2 trillion annually over the rest of the decade. As a result, the national debt held by the public — $17 trillion earlier this year — is projected to reach a staggering $41 trillion by 2030, even before accounting for any additional pandemic-relief measures or the expensive proposals that Democrats are salivating to enact if they sweep the White House and Congress this November.”
USAGOLD note: When you find yourself in a very deep hole in the new normal, the only option is to keep digging … … until the walls collapse. The answer to the question posed above? The Federal Reserve, of course. It has already, according to Reidl, “monetized more than half of the new pandemic-related debt.” With the rest of the world worried about financing its own debt, the options are likely to be limited and that, when all is said and done, is perhaps the most basic reason why gold has behaved as it has since March of this year.
Cartoon courtesy of MichaelPRamirez.com