What happens when 80 million Baby-Boomers start to qualify for Social Security?
*Dow Theory Letters, Richard Russell, October 11, 2007:
"You think the US government's balance sheet is over-the-top now?
Listen, over coming years, these programs will rack up $50 trillion in
government obligations. How's it all going to work out?
I have my own thoughts on the Social Security and Medicare situation. I
believe that the US government will address the situation two ways. The
first way will be to scale back on the benefits -- there's just no
other choice. The second way that the US government will address the
situation will be through monetary inflation.
The government will have to print the money to cover the coming tidal
wave of unfunded liabilities. This process will have a brutal impact on
the dollar. The purchasing power of the dollar will continue to head
down. In my lifetime I've seen the purchasing power of the dollar lose
80 percent of its value. And I have to wonder what the dollar will buy
ten years from now -- fifteen years, twenty years. It's very sad,
indeed.
This is the reason to own gold. I hear a lot of talk about gold not
keeping up with inflation, gold spending twenty years between 1980 and
2000 doing nothing or simply declining. Forget it, that was then, this
is now. As I see it, the third phase of the great gold bull market lies
ahead. Gold is fated to rise to 'impossible' heights in terms of
current US dollars. I know this sounds far-fetched to today's impatient
holders of gold. But for a great move to materialize, it has to be
considered to be 'almost impossible' in advance.
Another way of putting it is that for a move to be huge, the public has
to be clean of the item to start with. Ideally, nobody should be in the
item. And today the US public is 'clean as a whistle' when it comes to
owning gold. 'Oh yeah, I've got gold. I bought two American Eagles a
year ago, and I still have 'em put away some where. Heck yeah, I got
gold.'"
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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