In the next 36 hours Gold & Silver will take a beating. Last night the President & Congressional leaders announced an agreement to raise the debt ceiling. Neither side can claim a victory & neither side particularly likes the deal. Now, is this the deal I would have preferred? No. I believe that we could have made the tough choices required — on entitlement reform and tax reform — right now, rather than through a special congressional committee process, the President said during his Sunday announcement.
On the other side of the aisle Republican Senator Mitch McConnell, I’m sure there will be both Democrats and Republicans who, in the end, find the agreement wanting in one way or another. The only group that may be able to walk away with a victory in this entire deal are the Tea Party Republicans. They were able to hold the line and bring the entire discussion over to their point of view.
While this deal is just another kick the can down the road deal it seems to do nothing for the actual problem. Charles Dickens wrote in David Copperfield, Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. Until there is real spending reform in conjunction with increased revenue the Debt Crisis will become an annual event much akin to the Running of the Bulls in Spain.
While gold and silver will retract over the next week or so don’t expect this to last. This Debt Deal is so fraught with uncertainty that metals will prove once again to continue being the safe-haven for investors. Acquire Gold & Silver in the next week as it retracts then watch is continue to gain for the remainder of the year.