When one is prevented reaching by governments, it brings about an enforced situation where aberration flourishes in all societies and nations. While the world has been watching Capitol Hill unfolding on its responsibilities, trying to catch up and handle the debt ceiling deficit signed into a law yesterday by President Obama to avert a default, it further added to the crises Americans are facing. “I want to be crystal clear. Nobody has talked about increasing taxes now. Nobody has talked about increasing taxes next year. We’re talking 2013 and the out years”, President Obama stated.
When one thinks, that several months ago, the economic plan was to stimulate Americans waiting on the sidelines of Unemployment Street. All future air of trust in the government had dissipated in the offing. As 14 million unemployed continued to wait for a long awaited turnaround, unable to reach the frontline of optimism, the blowtorch in the debt deal had sealed America’s fate.
While the negative trend in global economy is running throughout the financial globe, and the American economic disaster is no less insane than the Eurozone countries, the inevitable crisis continues. Portugal is in need of a bailout, Greece needing a second one, Cyprus now probably needing a bailout and Belgium still has no government and France already has the highest deficit higher than any top-ranked eurozone country.
Now the remnants of Italy are boiling into the greatest default risk waiting for the Germans to bail them out. The Financial Times reports: “Spanish and Italian politicians rushed to formulate a fresh response to the debt crisis engulfing the two countries as their borrowing costs hit euro-era highs.”
To unravel the entire global economic fold, with such harsh austerity sweeping the world, without pessimisms as per se, it’s obvious, when banks sit on fat reserves and money is not moving the markets, the threat of a global tailspin sizzles. As the financial system continues to borrow and spend, the global economy becomes a dangerous menace to survival. To encourage belief in Germany for the Eurozone bailouts, or dismiss an upcoming recession in the US that could trigger further dollar weakness, is passé. What happens when Germany runs out of money? And, with currency weakness comes a bond market gamble which is more indicative today for investors to take shelter in precious metals. Germany can’t unravel the entire global economy and neither signing the bill to raises the debt ceiling to unravel the stumbling US economy.
As the governments spending continues the impact of running the risk of a negative outlook more likely be larger in the coming months on the markets. The “Super Committee”, will raise the taxes, no bones about it. “Immanent fears over inflation and the growing European debt crisis will drive sophisticated inventors to continue buying the yellow metal. Gold Prices are soaring on economic concerns to new record,” says Regal Asset Team of Analyst. Gold and silver are a plane that’s about to take off and they are heading in the right destination.