Fiscal Irresponsibility

As expected, the debt ceiling debate raged on until the eleventh hour in June. Then, miraculously, President Biden and Speaker of the House Kevin McCarthy emerged from the White House with an agreement… like Moses coming down from the mountain with the Ten Commandments.


Where’s Cecil B. DeMille when you need him?

After a few more days of histrionics, the House and Senate both passed the legislation, and President Biden signed it into law.

If you’re detecting a bit of sarcasm, you are right on the mark. Now, for the seventy-ninth time since 1960, Congress has chosen to kick the debt-filled can down the road as opposed to being leaders. They have chosen, as they have seventy-eight times prior in a fifty-three-year span, to shirk their responsibility of being fiscally responsible with our hard-earned tax dollars.

This is how great empires end.

Stronger Dollars?

For the past month, as the most powerful nation on earth wrestled with how it was going to pay its bills, the U.S. dollar, the world’s reserve currency, actually grew stronger versus its peers.

As measured against Canadian dollars, British pounds, euro, Swiss francs, Swedish kroner, and Japanese yen, the U.S. dollar appreciated. It went from 101 on the U.S. dollar Index to above 104.

This is mind-boggling.

To be clear, we cannot pay our bills. So, we arbitrarily increase our own debt limit to allow us to magically create new dollars out of thin air… with nothing to back them.

At the same time, the world is finding U.S. dollars less desirable. They are buying less of our debt. They are replacing U.S. dollars in their currency reserves with gold at the fastest pace we have seen since the 1960s. They are looking for ways to trade outside the U.S. dollar.

Yet, we are expected to believe the U.S. dollar is getting stronger… and the world’s only real money – gold – is falling in value.

Sorry. Try selling that to somebody else. I’m not buying it.

Gold Loses Luster

The dollar’s recent strength – which corresponds directly to gold’s recent weakness – is by no means an endorsement of the U.S. dollar or our feckless “leaders” in Washington, DC.

Rather, the dollar’s strength and gold’s seeming weakness are simply the markets’ reactions to what they believe the Federal Reserve will do next, given the recent numbers on inflation and employment.

With inflation stubbornly holding ground or inching slightly higher, the hope of a pause in interest rate hikes is vanishing. In addition, strong employment numbers of late – assuming you believe them – indicate that the Federal Reserve has not “broken” the economy yet.

This also leads to the belief that more interest rate hikes are coming.

Since gold is viewed as less desirable in a higher interest rate environment, the markets are giving the love to the U.S. dollar and scorning gold in the short-term.

What’s Your Next Move?

If you believe fiscal irresponsibility leads to a stronger dollar, don’t buy gold here. If you believe more debt makes an economy and a nation stronger, don’t buy gold here. If you believe increasing the money supply makes every dollar in your pocket worth more, don’t buy gold here.

For those who think this time in history is different, good luck with that.

It isn’t.

Fiscal irresponsibility is arguably the number one killer of great empires. Politicians spend more than they take in to secure votes to stay in power. They inflate the currency to finance the debt. In the end, they destroy the empire from within.

Do not be fooled. Your financial well-being hangs in the balance.

Now is the time to buy gold and silver well.

Understand that raising the debt ceiling is the opposite of fiscal responsibility. It simply allows our elected officials to continue to rack up even more debt… and they will.

Then, they will inflate the money supply. As a result, the price of everything in U.S. dollars will rise as more “worth less dollars” chase a finite number of goods and services in the marketplace.

Like the prices of everything else, the prices of gold and silver will rise as well. That’s why we say the best time to buy gold was yesterday, and the next best time is today.

As long as we price gold and silver in mismanaged fiat currency, the long-term trend will be for gold and silver prices to increase. And that’s exactly what they have done in U.S. dollar terms since the creation of the Federal Reserve in 1913.

To preserve your purchasing power – which is what we mean when we say Keep What’s Yours – buy gold and silver today… while the dollar is temporarily strong… while gold and silver are showing temporary price weakness.

I purchased my first gold at $258 per ounce. I purchased my first silver at $4.53 per ounce. Back then, many “experts” believed the prices of gold and silver were too high.

They were wrong.

Today, many “experts” are saying gold and silver priced near $2,000 and near $24 per ounce, respectively. are too high.

Guess what? They’re wrong again.

Raising the debt ceiling was bad for the U.S. dollar, bad for our economy, and bad for our nation.

But… over time… it will be wonderful for those with the foresight to buy gold and silver.

Call us at 800-831-0007 or send us an email to buy these precious metals today.

–Rich Checkan
President & COO
Asset Strategies International

If you enjoy this article and would like to learn more, please come visit us at Booth #400N at FreedomFest, “the world’s largest gathering of free minds,” at the Resanant Center in Memphis, July 12-15, 2023.

Presentation — “Gold: A Winning Portfolio Strategy” –Wednesday, July 12, 3:00 PM

Panel – “In Gold We Trust: Making Gold Accessible (and Profitable!) for Everyone” – Friday, July 14, 9:10 AM