Wednesday, March 16, 2011

Problem Denied Is Not A Problem Solved

Very often a problem denied is a problem solved. While denial works within some aspects of society, it finds little practical use in the world of money. Capital in a state of denial does not hang around long.

Smart money knows that a rubber band stretched too far inevitably breaks. Debt, despite the talk of reform and change, continues to skyrocket well beyond historical norms. The rising price of gold reflects capital's concern, but very few are listening because many still believe that problem denied is a problem solved.

Federal Debt Held by Foreign & International Investors (FDHBFIN) and the Equilibrium Price (FDHBFIN/OZ)


Federal Debt Held by Foreign & International Investors As a % of GDP (FDHBFINGDPR) and the London P.M. Fixed Price of Gold (GOLD):


Source: research.stlouisfed.org

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