The Global Ticking Debt Bomb and the Safety of Gold

U.S. Global Investors  ( Original )
FEB 26, 2018

Welcome to the new American birthright. No sooner do you make your debut in America than you find yourself born into a country where your average share of household debt is $40,000 from the moment you draw your first breath. Add that to your $63,000+ share of the national debt and you, newest average American, owe six figures as soon as you’re born.

Looking more long-term, there are mounting risks involving debt that make gold appear very attractive right now as a safe haven and portfolio diversifier.

A new report from the Federal Reserve Bank of New York indicates that U.S. household debt rose to a new all-time high in the last quarter of 2017. American families now owe a jaw-dropping $13.15 trillion, or roughly $40,000 per man, woman and child. That’s up 1.5 percent, or $193 billion, from the previous quarter, and up 8.5 percent from the high during the financial crisis.

Thirteen trillion is a head-spinning sum, but we can’t place all the blame on borrowers. For nearly a decade now, the Fed has kept interest rates at historically low levels, flooding the economy with cheap money.

I see this growing debt bomb as just the latest sign that investors might want to consider adding to their gold exposure. The yellow metal has been sought as a safe haven during times of economic and systemic market risk.

ORIGINAL SOURCE: Gold and the Global Ticking Debt Bomb by Frank Holmes at U.S. Global Investors on 2/23/18