Quote:
Originally Posted by Tiny
Our politicians, and for that matter the voters, don't have the backbone to see that through.
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I agree.
In the nearby thread "How are we going to pay for all this shit?" I posted this:
I don't think most people realize the enormity of the problem.
As you noted, raising all the income tax brackets relatively modestly wouldn't make much of a dent in the deficit.
But raising the capital gains tax rate would make even less of a dent in the deficit. The rate now is 23.8%; increasing it to 28% (which is about what most knowledgeable students believe is the revenue-maximizing rate) wouldn't be likely to raise more than about a penny of every deficit dollar. And raising it to levels much higher than that would actually
lower revenue. (See: Policy discussions leading up the the capital gains tax cut of 1978.)
And let's get real here.
No one is going to cut spending to any appreciable extent.
Anyone remember all the caterwauling in 2011 when the new Republican House majority wanted to cut domestic discretionary spending by a couple of percentage points? Exploding media heads convinced much of the nation that stuff would start collapsing all across the land if any spending was reduced.
And do you remember what happened in 1989, when Rostenkowski got attacked by a bunch of old people at a town hall-style event when he proposed some very small adjustments to Medicare? They literally chased him into his car!
So, I'm pretty sure we're just going to run humongous deficits until some crisis forces a course correction, which it eventually will.
Unfortunately, we're a nation that's adrift with no serious leadership; acting like an alcoholic who has to "hit bottom," as they say, before seeking treatment.
Then one big question centers around what sort of Fed policy will eventually be called upon to accommodate new debt issuance. I'm not exactly in the "doom scenario" camp, though -- but some people are, as evidenced by all the recent gold evangelism.
To wit:
Quote:
Originally Posted by CPT Savajo
...A fair price would seem like $100K or $150K an ounce according to experts in the precious metals field...
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Huh?? What "experts" have said anything of the sort? The only candidate I can think of who anyone reading this is likely to have ever heard of is Peter Schiff, and no one I know considers him any sort of an "expert" on anything. He's an irrepressible salesman who's been making a very good living peddling what I've sometimes referred to as "doom porn" for many years. Apparently the narrative is that we're about to morph into something like pre-Milei Argentina.
Quote:
Originally Posted by CPT Savajo
You're incorrect. Gold would easily be much higher if big banks weren't shorting it with paper contracts. You know the game is rigged. The S&P is rigged upwards while physical gold is rigged downward and the riggers seem to be losing control. The real price of gold is well north of $10K, there is no ceiling when you account for market rigging and currency creation into the trillions of dollars. The bottom for the S&P is $0.00 denominated in worthless currencies.
The U.S. dollar was unpegged from the gold price of roughly $42 per ounce (specifically $42.22) when the Bretton Woods system of international exchange completely collapsed in 1973.
5000/$42.22 = 118X return thus beating the S&P 500. If you account for a $200 premium to take possession of 1 oz troy gold the return widens to roughly a 123X return beating the S&P 500. Gold's high of $5600... 5600/42.22 = 132X return in early 2026. Today the USD is completely collapsing, foreign Central Banks hold more gold on their balance sheets than USD's as part of their reserve holdings. Gold always wins!
The S&P 500 is grossly overvalued whereas Wall St. and Main St. have become completely disconnected from reality while gold is severely undervalued, tell'em the rest of the story Tex.
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No, I am not incorrect. You need to do a little fact-checking.
First, banks are not “rigging” the market with shorts in an effort to force the price down. Large players run both long and short positions; commercial shorts are mostly hedges against physical inventories or future production and don’t create a one‑way, permanent lid on the price. Over time, those long and short positions shift with the cycle rather than just pushing gold lower.
Second, your reference to the $42.22 price in 1973 was not an "investable" or market-determined price; it was merely a statutory price the Treasury used at the time to value its gold reserves. As an American you would not have been able to buy gold legally at any price, and in fact it was trading in London and Zurich at substantially higher prices at the time of the US $42.22 accounting entry decision. Therefore, you cannot reasonably use that statutory price for your cost basis. (And even if you could, gold would still end up way, way behind, as you can easily see.)
Third, on the earliest date you would have been able to legally buy gold, the price was roughly $180. So each dollar invested then would be worth about $28 today.
Fourth, I pointed out earlier that gold just sits there earning no income, while stocks (most of them, anyway) pay dividends. The price level of the S&P 500 since 1/2/75 has appreciated almost 100-fold. But that's not even the half of it! Suppose that you had reinvested your dividends during this whole journey. In that case, your holdings would have grown roughly 300X.
That's the beauty of compounding over a very long time. Try it, you might like it!
