How Obama’s Job Proposal Will Affect Gold and Silver

Commodities Commodity Prices
by 

President Obama’s upcoming jobs proposal just might
be the final piece of the puzzle to guarantee a huge upswing in gold prices and silver prices.

Why? Well here’s what we know so far:

  1. He plans on spending money to create more
    jobs.
  2. He plans on tackling the deficit.

What do we know about his first goal?

We know that the Federal Government has spent lots of money in the past on
creating jobs. The problem of course is that they only have that money in
the first place because of their self-granted authority to take it from
producers and make it from thin air.

These two tools: taxation and the printing press are the very same tools
that have been used as weapons against savers, investors and
producers.

And yes, before I get accused of being a right wing mouthpiece: both
Democrat and Republican alike are responsible for wielding these tools.
Indeed, while wages have fallen in the private sector, and the standard of
living has flattened out for the average American, the political class is
as healthy as ever.

Politicians have necessarily increased their power, wealth and influence at
the expense of regular folks.

So when President Obama utters the words: “I’m going to spend money on
_____” it just doesn’t matter what he’s spending it on.

Because it will inevitably serve his interests primarily and your interests
will take the scraps of any coincidental benefit.

Any sane person realizes that the Government can not create jobs. If that
were the case, then we would have zero unemployment, because we could
simply vote for people who would make those jobs possible. One half of the
unemployed could dig ditches and the other half could fill them.

But that’s not employment, and no one would be fooled for long.

So the end result will be more spending. And that’s almost always bullish
for government and for commodity prices.

Why? Well because more spending means we need more bureaucracy to manage
that spending. We need inspectors and underwriters and accountants and
overseers. We need a whole army of Cat-in-the-Hat underlings that only
exist to suckle on the teat of this new spending.

And why does more spending equate to higher commodity prices? Simply
because our leadership has been unable to raise taxes fast enough to catch
up with new spending. So all new spending is conjured out of thin air. More
currency units chase the same amount of goods, causing their prices to
rise.

So, you probably know how I feel about Obama’s plan to reduce the
deficit.

On the face of it, it sounds great. But when our leaders tell us they plan
on reducing the deficit, notice how carefully they choose their words. They
don’t say, “we’re going to eliminate the deficit.”

Nor do they say, “we’re going to create a surplus.”

No, they just mean that they will reduce the size of our annual deficit,
all the while fully recognizant that their plans will still add more debt
to the total.

That’s why the debt ceiling of over $16 trillion will be met – because our
leaders are still spending more than they take in.

So my advice would be to take Obama at his word: we will spend more. And we
will continue to spend more than we have.

And you and I will continue to trade in the duplicitous dollar for the
safety and surety of precious metals.

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