This weekend we hosted some twenty-something relatives. We had the chance to spend yesterday in Washington D.C. walking around the Mall, going to a Turkish festival, and visiting some museums.
There were works by Matisse, El Greko, and Rembrandt. They were awed by the Roy Lichtenstein House I sculpture, and the Hope diamond wasn’t as big as everyone thought it would be.
The new dinosaur exhibit in the Natural History Museum was pretty good but I miss the old whale skeleton that used to hang from the ceiling. And we could do with less propaganda about climate change.
DC is doing well as you might expect. They moved the homeless camps away from the tourist areas and the streets are clean. There is a vibrant cityscape full of trendy restaurants and shops. Heck, even the Redskins, I mean Commanders, are winning these days. I looked up from my $22 burger at the hipster bar and saw they were beating the Panthers 37 to nothing.
The U.S. capital is where the money is. Six of the 10 richest counties in the country are in the Maryland and Virginia suburbs surrounding the city and another eight are in the top 25.
Trillions & Trillions
The money comes from debt with taxes paying the interest. We have two deficits: the national debt which stands at $35.7 trillion, and the budget deficit which is at $2 trillion so far this year.
The GDP stands at $29 trillion. In 1980 the national debt to GDP ratio stood at 34%, now it stands at 135%. Financial historians will tell you that once debt reaches 130% of GDP currencies start to fall apart and countries run into a debt crisis.
You can see these numbers in real-time here: https://www.usdebtclock.org/
According to the Debt Clock, we are now paying more interest on our debt than we are paying for defense.
Obviously, the Treasury Department and the Fed would like to pay less in interest which is why they cut the Fed rate by 50 basis points last month. The problem is that the bond market – those people who actually buy the debt – didn’t like those numbers. Instead of going down 50 basis points, the 10-year treasury went up by 55 basis points.
This means that the Fed has lost control of the bond market. It also means that those waiting to buy a house won’t see lower mortgage rates.
It also means that the U.S. currency is falling in value against hard assets like gold and silver. Silver is breaking out. Silver hit a 10-year high of $34.49 an ounce today.
The great thing about silver is that once it starts to move it really gets cooking. Last May I told you to buy Avino Gold and Silver (ASM) at $0.90. Today it traded at $1.49. That’s a 66% gain so far. Full disclosure I own ASM but I’m not selling until we are above $2.25 and then I’ll sell half.
In my latest issue of Christian DeHaemer’s American Stock Investor, I recommended three more silver stocks. These are all up about 20%. This service remains closed to new members at the moment but we are looking to open it up shortly. Keep an eye out for a special invitation.
Gold is also hitting new all-time highs by the day. Gold is up 37% and Silver is up 44% this year. Both metal’s have beaten the S&P 500 in terms of price.
That said the gold/silver ratio is at 85. That means it takes 85 ounces of silver to buy an ounce of gold. This is on the high side. When silver gets moving to the other extreme it only takes 40 ounces of silver to buy one ounce of gold.
If silver gets some interest from the “animal spirits” and reverts to mean you could see it go up faster and farther than gold. I personally own a lot of silver and I’ve recommended it my readers. We are about to enter the fun times.
All the best,
Christian DeHaemer
Outsiderclub.com
Go Woke Go Broke: https://www.outsiderclub.com/boeing-down-in-flames/
AI Gets Bumpy: https://www.outsiderclub.com/cracks-in-the-ai-fasade/
Market is Wrong: https://www.outsiderclub.com/the-teetor-totter-of-death/
