Brinker Comment: Bob opened the broadcast discussing the new figures on gross domestic product. Bob said his projection has been for a slow-growth economy as defined by a slow rate of growth in real GDP (adjusted for inflation) and we continue to see that with the number for the third quarter coming in at 2.0%. When you couple that number with the first half of the year, you are looking at an annual rate of growth of 1.8% for the first 9 months which is the type of slow growth that Bob thinks we will see for the remainder of the year.
DEBTS AND DEFICITS
Caller: At some point, the Federal Government will start to have to pay off the national debt. The caller said he thinks it seems like an unsustainable situation that will either be addressed by cutting spending or raising taxes. Or the government could start printing more money which could lead to inflation or hyper-inflation. How likely is it that we would see inflation or hyper-inflation and is there anything the average investor can do to hedge against this possibility?
"Witnessing the Republicans and the Democrats bicker over the U.S. debt is like watching two drunks argue over a bar bill on the Titanic." Kirk LindstromBob said there are essentially no cases in the history of the world where the country has paid off its national debt and we will probably never even make a serious down payment on paying off the $16 trillion national debt. We will pay the interest on the national debt as long as we can afford to do so. As far as the national deficit, that is in play and must be addressed and that is a big deal. Hopefully, Congress will get to work on the annual deficits which at the current pace is not sustainable.
EC (David Korn): Our $16 trillion dollar national debt amounts to $51,484 for every man, woman and child in our country. Check out this interesting article entitled, “Breaking down the national debt” at the following url: http://tinyurl.com/8p9vy5u
Kirk's Comment: I don't think enough attention goes to just how large the deficit is and how much borrowing occurs for every dollar spent. I like how Bob Brinker has warned about excessive spending for years and I'm doing my part to spread the word. Read my Seeking Alpha article:
Can you imagine asking anyone for a loan, home equity or a refinance of a home loan, if you knew you would never pay it back?
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