us default looms larger, page-21

Enoon, while agree that the Republicans are scumbags for all sorts of reasons, I think that it's just stupidity on their part this time around. They've no idea of the consequences, they're naive enough to think that the USA is still the seat of all power and that the world won't toss them and their economy to the lions if they continue their arrogant stance.

At the minute the rest of the worlds funding is the only thing that enables the USA to carry on the way it is, and they spend most of that debt on keeping the rich, rich. Meanwhile the average American has second world quality of life with poor access to health care, poor life expectancy (below Cuba), poor retirement security, poor social safety nets, poor state education, infrastructure near to collapse and few friends around the world.

The irony is that the "4 Trillion" package is a drop in the ocean compared to the scale of both the official and unofficial debt - and would still leave an enormous funding gap. Taxes have to rise, the last thirty years of economic policy have concentrated nearly all new wealth into the top 10% of pockets, yet the wealthiest spend the smallest proportion of their income on taxation - meanwhile corporate America sits on $54 Trillion parked away from view. The Reagan era rhetoric of generating jobs, prosperity and rising tax receipts by cutting tax is hopelessly out of date, money that should be collected from the wealthy is clearly not being spent on job creation (see falling real terms employment in the US), it's being hidden away in Swiss bank accounts, spent on overseas luxury goods and probably spent on PM's too.

The real reason the Republicans are playing brinksmanship is down to the funding of their upcoming campaign for the white-house and the disproportionate power the fundamentalist (read mentalist) Tea-party is exerting on Republican policy (they fear splitting their vote and definitely not being elected). They're sadly mistaken if they think the Whitehouse will be worth occupying or that the economy can be patched up again after a US default - they have been completely blinded by their greed for power.

Whatever happens, barring a few downward blips, it's onward and upward for gold and precious metals, political posturing will only affect the speed of the rise.