Why Hold a Core Position in Precious Metals Amid Ongoing Trillion-Dollar Debt Growth?

Sean Brazney: Hello, my name is Sean Brazney, Sales Director for Monex Deposit Company. We’re here with Jeffrey Christian of CPM Group, one of the many analysts over there at CPM Group, and always a pleasure to have you with us today, Jeffrey.

Jeffrey Christian: It’s always a pleasure to talk to you, Sean, and to work with Monex.

Sean Brazney: When I’m looking at information out there and been tracking all this information that you and I talk over on a regular basis, and we get a chance to do these videos together, and the number just keeps growing, you think about deficits and you think about debt for just the average investor, it kind of seems to pile all into the same number and just keep growing and growing. Sometimes, it makes it hard to paint a straight line to all the data and have it make sense, but you do that really, really well. So, I guess my point today really being deficits compared to debt. The CBO came out from July of last year to July of this year running a $1.6 trillion deficit, and they’re saying this is going to continue to grow or running $2 trillion deficits for the next 10 years. We look at the Fed balance sheet and debt going from $4 trillion to $7 trillion to somewhere between $7 and $9 trillion now. I’m starting to lose track of that. It’s spend, spend, spend, and it just looks like inflate and tax us forever more. It really comes down to building a core position in the precious metals, because this is not going to end. Can you kind of put some of those numbers in line for us and make sense of all this for us?

Jeffrey Christian: In our view of why you should be investing in gold and silver now, we have a list of economic and political problems that all suggest you really want to have a portion, a good portion, of your wealth in gold and silver— intangible assets that are no one else’s liabilities—but at the top of that list is debt and deficit spending. We all tend to focus on the US federal debt and deficit and that’s very important, but the reality is that it’s not just the US federal government, it’s state and local governments It’s other countries sovereign debt, and it’s corporate and private debt. On a global basis collectively, the world owes three times its GDP, it’s an enormous amount of debt.

In the United States, yes, we focus on the federal debt and we always say, first off, you have to understand it’s the deficits that are the real problem, the debt is the consequence of the deficit spending, and the deficit spending is fiscal policy. There’s monetary accommodation by the Fed, but it’s really fiscal policy that causes the deficits to run and that’s the Congress and the administration, and it doesn’t matter if you’re Democrats or Republicans.

Nikki Haley said it really well in the first Republican debate in August. She said, “Look, it’s not the Democratic Party’s politicians’ fault for these massive deficits and rising debt. The Republicans are just as responsible, if not more so, for the accumulation of debt on the federal level.” Now, we have this enormous debt now. Now, if you go back, we used to have $200, $300 billion deficits and they were adding to the debt very rapidly, and then the global financial crisis came in the great recession and we had like a $1.4 trillion debt deficit that year, and people completely freaked out, as they should have, but that was a one-off response to a crisis. We got behind the crisis and we started correcting some of the fiscal problems. We got back to about $460 billion deficit, which is still an obscenely large deficit, and everybody was cheering. Yes, it’s exceedingly large, but it’s a third of what it was. That was a one-off deal, but now in the last several years, the last three or four years, we’ve had multi-trillion-dollar deficits and they’ve just compiled and snowballed the cumulative debt of the country. So, it’s now more than $32 trillion dollars, I believe, and the CBO, the Congressional Budget Office, which is this nonpartisan economic department that says when the Congress is considering a piece of legislation, the CBO does an independent audit and analysis and says, “This is what it’s going to cost the nation.” The CBO says we’re going to be looking at multi-trillion-dollar deficits, as you said, for the next, they only project out like 10 years, but they’re seeing this as an ongoing problem. That kind of deficit spending on an ongoing basis, this is not a response to a crisis, this is a long-term structural policy of the U.S. government now. That has to be worrisome to everyone. It just says very clearly, you should have a significant portion of your wealth, intangible assets that are nobody else’s liabilities that you can have access to, and that’s gold and silver. It’s plain and simple.

My parents were gold bugs and silver bugs. They were big accumulators of gold and silver. They never understood why people needed me to tell them to buy gold and silver. They grew up in the depression. Both of them lost their fathers in 1928. So, they went through the depression being raised by single mothers. Then World War II came. They understood the inherent reason to own gold and silver and to have a significant portion of your wealth denominated in gold and silver, and they could never understand my job. Why would people pay you, Jeff, to tell them to own gold and silver? That’s like something that it’s an axiom to them.

Sean Brazney: Yeah, its hats off! You hit a little heartstring for me right there. Hats off to all those single mothers making that happen.

It just brings up all the details that need to be covered and I know that CPM group is coming out with a report. You told me here earlier, that sometime at the end of October and it’s dealing with deficits and debts. So, don’t forget to check out that report from CPM group when that comes out. Also, when you call Monex and talk to an account representative, don’t forget to get your free 2023 Precious Metals in the Eye of the Storm report and we’ll help you build that core position, as soon as you’re ready.

Thank you for your time, Jeffrey.