Stock Market tumbles.

Today the Dow Jones plunges more than 500 points while silver falls over $3. The Dow has given up everything it gained this year in less than 2 weeks. Investors are buying into Treasuries sending yields to Oct of 2010 lows. If yields on the 10 year T-bond get to 2% or lower, it would be time to short treasuries if they even get that low. I bet with some more QE; quantitative easing they can get that low. I mean, for crying out loud, the Switzerland national bank and the bank of Japan have both intervened this week in the international currency markets by essentially flooding them with extra capital. Look up "currency war". Now that the US government has raised the debt limit authorizing it to borrow more means the Federal Reserve will create more 'Federal Reserve Notes' (money) out of nothing and loan it to the banks, who then are able to loan the Government, collecting interest. If the stock market slips any more, Bernanke might shoot up the economy with another dose of QE, essentially like Japan and Switzerland. This is why gold is only down 2% during this sell off from an all time high that was reached yesterday. As a matter of fact, the Dow/Gold ratio is now at 6.9. Silver is down more significantly only because it's subject to more volatility. There are some economic numbers coming out tomorrow, unemployment i think, that aren't looking so good. If there was a genuine economic recovery where unemployment got back below 5%, the jobs would be back by now after 3 years. Unemployment is expected to stay at high levels for a few more years. If there hasn't been a real recovery by now, then there isn't going to be one. Ron Paul 2012.

Deficit spending is out of control because of current monetary policy.

Peter Schiff’s analysis of the shenanigans in Washington is great when he says this current debt crisis is nonsense and self imposed. The debate behind the scenes going on inside the big government party is at what pace the borrowing will continue, not if the limit will be raised or not. The debt limit is certain to be increased, the bond markets know this, the banks have been reassured this, Moody’s and S&P know this and most of all, the Federal Reserve knows this. The debt ceiling will be raised, the deficit will grow and the real crisis is when our creditors no longer want to lend the US Government any more money or even if our creditors demand a higher rate of interest. That’s the crisis that is coming if the US government is to raise the debt ceiling and continue on its current path. Its because of the Federal Reserve's loose monetary policy of forcing interest rates down to 0-0.25% and keeping them down that has allowed the US Government to borrow at such a cheap rate. 

The only way to end the never ending deficit spending is if we are willing to take the bad tasting medicine from the good Dr. himself, Congressman Dr. Ron Paul from Texas. It would create the necessary correction in the market to create growth again by balancing the budget, ending the wars and our military presents around the world saving trillions with a T of dollars and thousands of lives. And at the same times restoring the US Constitution and our civil liberties.

But if we continue and the lenders no longer want to lend or demand a higher rate of return to hold US debt, the Federal Reserve will monetize the debt, no doubt. And therein lays the problem. There will be a global dollar crisis brought on by the FED and the government over the last four decades and create hyperinflation for all American's not oblivious to the fact, if deficit spending is allowed to run its course. That's the crisis we will see this decade. The global dollar bubble is the fattiest of them all and certain to pop. Ron Paul 2012.