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We’re not hearing as much these days about the deficit, money printing and the national debt. Do they still pose a serious risk to investors?

Bob Wiedemer
May 18, 2017
Video Transcript

Bob Wiedemer: Don't kid yourself. Even though nobody is talking about the debt or dealing with it, on the Republicans or the Democratic side, the government debt is a huge issue. We now have a debt-to-revenue ratio of 6 to 1. That means our debt is six times what our revenues, our tax revenues, are. That's an amazing number. It's probably the most important number you should know or a financial analyst should know, is that we can't possibly pay off our debt. I mean, let's face it, would you lend money to somebody, who already has six times their total income, their total revenues, in debt, probably not. Why would you do it in the U.S. government's case? Because we can print money and I hear that all the time. I just did a presentation in Atlanta and I said, "Why can the U.S. government get away with this?" Because we can print money. Everybody in the audience just mumbles, "Yeah, we can print money." It is terribly important why all this works, right now, and why it won't work in the long-term. I know, it seems like, well... we've been building up the debt for a long time and it doesn't matter. Well, we have been building up debt for a long time, but we've only recently really just started the massive money printing. We've paused it now, but don't think for a second it's not coming back and when it does it's going to be scary. It's going to start adding that uncertainty. Again, like today we might see the markets happy as it goes up, but that underlying uncertainty is growing, because everybody knows that in the end this can't possibly work.

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