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Debt crisis – Gold to reach over $14.3 Trillion U.S. debt limit rise

by admin on November 30, 2012

american debt crisis gold climbsDebt is something that almost everybody has to deal with. When speaking of the federal debt, the debt situation in America has constantly risen since the year 2000. Even though the United States has the national debt crisis since its time of inception, the federal debt amount with respect to the GNP or Gross National Product has only risen drastically in the recent years. Jill Schlesinger of CBS Marketwatch states that the national debt rate has almost doubled since 2000, from $5.629 trillion to $14.3 trillion. If you’re an individual crushed under an incredible weight of credit card debt, you might consider taking help of a debt reduction company. These debt reduction organizations specialize in helping individuals lower their debt burden without filing for bankruptcy.

The value of gold is almost stable in New Zealand NZ$ and U.S. dollars but slightly lower in other currencies today because of the risk factors involved in the bullion market. A majority of the Asian indices were higher, barring the Indian and Chinese markets, and European indicators have also gone up. Presently, gold is being traded at EUR 1,116.1, USD 1,587.00, GBP 983.50 and CHF 1,302.10 for every ounce. Relief has also been witnessed in Eurozone debt markets with bond profits dropping. Reports of ECB involvement via marginal bond purchasing have helped stable issues. However, the ECB has not yet given any signal that’s in support of the unstable European sovereign debt markets. As of now, markets seem to be more engrossed in Apple’s colossal profits than government’s huge debts. The U.S. House was in control of the Republicans, challenging a veto warning, voted (234-190) to slash federal expenditure by almost $6 trillion and call for a constitutional revision for a reasonable budget to be provided to the states in swap for avoiding an alarming Aug. 2 government default.

Timothy Geithner, Treasury Secretary has declared that the government will run short of options to avoid a default in 13 days of time. Moody’s Investors Service and Standard & Poor’s Ratings Services have stated that they are expected to lower the American credit rating if Congress fails to take the necessary steps. An augmentation in the $14.3 trillion American debt ceiling is unavoidable and is a matter of when rather than if. So far, gold is nearly 12 percent higher in terms of dollar and is also the top performing currency in the globe in the last year. Over the past 12 months, the value of gold has increased by 33 percent against the American dollar, outpacing almost 150 other currencies of the world. Quite evidently, gold has escalated by almost 6.5 times in the past 11 years. Nevertheless, in the bullion market of the 1970’s, gold ascended 24 times to over $850/oz from $35/oz in the last 9 years. When altered for inflation, gold remains sufficiently less than its 1980 record high of $2,400/oz.

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