Baby Boomers Rush to Gold as National Debt Nears 20 Trillion Dollars
LOS ANGELES, Dec. 13, 2016 /PRNewswire/ -- The National debt nears $20 trillion, according to the U.S. National Debt Clock.
Since the election, American Bullion, the leader in adding physical gold to retirement accounts, has seen an increase in interest from baby boomers due to the concern over the growing national debt and the debt ceiling.
The U.S. debt is the sum of all outstanding debt owed by the federal government, which is currently nearing $20 trillion, according to the U.S. National Debt Clock. The government owes two-thirds to public debt composed of U.S. treasury bills, notes, and bonds buyers, buyers who are typically individuals, companies, and governments. The other third is intragovernmental debt, which is owed to various government departments that hold government account securities, such as Social Security and other trust funds.
Baby boomers are turning to gold because a high national debt slows the economy: as the debt increases, interests rise. The rise in interest is a result of cautious debt holders who want compensation for an increasing risk. Diminished demand for U.S. Treasuries also increases interest rates, consequently slowing the economy.
"The rapidly rising national debt is creating a situation that is making many investors very concerned," says Orkan Ozkan, CEO of American Bullion. "During the election, factors like the national debt are often overlooked by the press. American Bullion has seen a spike in customers looking to add physical gold in their retirement accounts because they are very worried about the unprecedented national debt which carries a huge risk to their financial future."
With the diminished demand for U.S. Treasuries comes the diminished value of the U.S. dollar. As the dollar value declines, foreign holders receive currency with a diminished worth, consequently decreasing demand. At that point, the U.S. will have to pay exorbitant fees for the interest alone.
Gold investors know that a weak economy results in high gold prices. When the economy performs poorly, gold prices rise because investors buy gold as protection. During Brexit, gold prices surged $100 an ounce in six hours, rising from $1,254.96 at 4 p.m. on June 23, the evening of the Brexit vote, to $1,347.12 at midnight. This rise was a result of gold's high demand among investors who use gold as a hedge against a declining euro and British pound. Click here to see a chart that displays the correlation between the national debt, debt ceiling, and price of gold.
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SOURCE American Bullion, Inc.
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