gold breaks out, page-158

Hi there Sid

"---The US has zero intention of paying off its debt.---"

Absolutely correct.

Why would they? There are investors out there who want to lend to the US government and the money is always cheap relative to the long term returns.

The pricing of Government bonds also provides an important benchmark that assists efficient pricing in the broader markets.

Example: A few years ago the Australian Government repaid all its inflation indexed (CPI) bonds which were the benchmark for risky CPI bonds and CPI swaps. Without a pricing benchmark all those markets dried up leaving position holders with a truck load of risk that was completely unmanageable. It is one of those quiet nightmares that never makes the papers.

Debt (or government debt) is not always a bad thing.

Cheers