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August 5, 2011 / Jeb

Gold, Silver and Long Term Treasuries Rally As Deflation Rears Its Ugly Head

The musicians are fiddling as the world burns. Global markets are navigating slowly in an ocean of greed, stupidity and compromise. Hundreds of years ago, masses of people took to the streets of Europe dancing madly in a kind of national “moshpit”. The cause of this “St. Vitus” mania was never diagnosed.

Today, we are witnessing a similar type of irrational behavior which defies reason. Prominent politicians and economic elites are doing a macabre dance in the grand ballroom of the supposedly unsinkable ship of state. How else to explain that the debt reductions being considered save perhaps a couple of trillion dollars over the next ten years? They are being lauded as meaningful reforms. In reality, they are bandaids applied to an arterial hemorrhage resulting from massive debt and mounting  deficits.

It is just not computing.  These ten year stratagems to control debt are an inadequate tourniquet that will only worsen the bleeding. Huge debt increases or deficits will continue to grow. The measures necessary to revive the patient are nowhere being proposed. Our public sector is swollen beyond recognition.

Read the full article by clicking here.

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