As the United States closes in on possible default in less than two weeks, economists are debating whether or not such an event would be as devastating as Treasury Secretary Janet Yellen claims. Is she fearmongering for the sake of negotiations or is she serious when she says not raising the debt ceiling would cause “catastrophic” events unlike anything the U.S. economy has ever seen?
The speculative answer to that question comes down to which economists you believe. They’re all over the board right now ranging from a default would be no big deal all the way to a default would cause economic carnage that could devolve into a full-blown economic collapse in a matter of months.
Yellen seems to be in the latter camp, saying, “In my assessment – and that of economists across the board – a U.S. default would generate an economic and financial catastrophe.”
Larry Kudlow, who famously doesn’t trust the Treasury Department for their “lack of credibility,” recently said he’s concerned Yellen may actually be correct this time. He even warned of Treasury borrowing from accounts, including retirement accounts, to keep things funded. According to Kudlow [emphasis added]:
“I know all these numbers are boring, but I hope they paint a picture and tell a story that an inflation-prone, stagnant economy bankrupts the country. That’s where the damaging debt comes from. Say it again: inflation-prone, stagnant economy and continued overspending. Now, to get even more boring – I’ve got tell you how exciting this is for me personally – there’s only so much the Treasury can borrow from the civil service retirement, the postal service retirement, the federal financing bank, the exchange stabilization fund, and the thrift savings plan. Actually, borrowing from these retirement plans is itself a pretty terrible idea, but that’s what happens when you have a malfunctioning economy with continued overspending and high inflation.”
The risks to retirement accounts are of particular interest to those who have not engaged in rollover or transfer moves to self-directed IRAs. Both Ira Bershatsky from Our Gold Guy and Jonathan Rose from Genesis Gold Group have been busy over the last few weeks helping Americans do so without the gimmicks or high-pressure sales tactics.
Yellen was joined by her advisors in warning that a default could decimate both the jobs market and the stock market. They ran a simulation in which the financial devastation was unprecedented.
“It finds that it could lead to a downturn as severe as the Great Recession. In its simulation, over 8 million Americans lose their jobs. Business and consumer confidence take a substantial hit. The value of the stock market is slashed by about 45 percent – wiping out years of retirement and other household savings,” she described.
Many economists are predicting that precious metals will skyrocket whether there’s a default or not, though both Bershatsky and Rose are hesitant to make such predictions.
“Precious metals are about being safe havens,” Rose said. “If the prices do go up, that’s great, but that’s not why people are having us transfer or rollover their retirement accounts into physical precious metal IRAs. Their concern is that whether there’s a default or not, the markets and the U.S. Dollar will suffer.”
It behooves Americans to learn what they can about physical precious metals before the Biden-Harris regime either makes a move or doesn’t in the next couple of weeks. Contact Genesis Gold Group or Our Gold Guy today for an honest assessment of your current situation.
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