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How will the Debt Ceiling Debate Affect Gold and Silver Prices?

the debt ceiling and Gold and Silver pricesEvery credit rating agency, especially FITCH, has warned that they will downgrade the U.S.a��s credit rating if the governmentA�doesn’tA�effectively handle raising the debt ceiling and cut $4 trillion from our current $16.4 trillion deficit. If our credit rating is downgraded, our unsustainable debt will be subject to an interest rate increase to try and entice investors to buy our (less valuable) debt securities.

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The Republicans are going to use this opportunity to try to force President Obama to cut spending across the board (including entitlement reform, the largest driver of U.S. national deficits) to satisfy the requirements of FITCH & the other rating agencies. But the Democrats dona��t want to make significant enough cuts in spending as evidenced by the Fiscal Cliff fiasco last month that actually raises our debt by $4 trillion over ten years.

We still dona��t have a national plan to reduce our debt and spending, which means the upcoming debt ceiling battle is inevitable.

Several unreasonable solutions have been given to avoid this much-needed national debate over our debt levela��such as the minting of a $1 trillion platinum coin or invoking the 14 antibotics for women canada. th zoloft online overnight. #Zoloft canada. zoloft dosage. Amendment to allow President Obama to unilaterally increase the debt ceiling. Unfortunately, this solution would strip Congress of their largest responsibilitya��the funding of the U.S. governmenta��and would promptly wind up in the U.S. Supreme Court for constitutional clarification.

Neither the status quo or the proposed a�?solutionsa�? would satisfy the rating agencies requirements, so it is possiblea��even likelya��that our countrya��s debt will be downgraded yet again.

So how will this affect you?

Ita��s not just the countries interest rate that will increase. Mortgage rates, credit card rates, personal or business loansa��any spending that carries an interest rate will increase. Most likely, this will directly impact your budget.

A downgraded credit rating will also lower the value of the dollar and cause gold and silver prices to spike upwards, just as they did in August 2011, when the price of gold skyrocketed to more than $1,950 per ounce. We can expect to see very similar price increases in the precious metals complex this time.A� Already gold and silver are rising in value in anticipation of this coming debacle.

How high will gold and silver rise? No one knows, but a 10a��15% increase is not unreasonable to expect, with a similar decrease in the value of the U.S. dollar.

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