The so-called government “Super Committee” was constructed to brainstorm solutions for managing America’s widening debt debacle. Once again, the US political realm’s alleged best and brightest have succumbed to the prevailing crisis. No answers, or even ideas were forthcoming, as the witching hour passed, making automatic budget cuts into grim reality.
Europe and other economically troubled economies struggle with similar issues, while the assets of many Americans are frozen by the fear of a potential impending descent into the next great fiscal abyss. Financial markets gyrate with each piece of bad news, but many investors are still unprepared for any likely scenario.
As residents of the greatest world power, Americans might feel that our problems are not as serious as those faced by other countries. The temptation to become complacent in the face of the likely spread of the European contagion to US shores should be tempered by the facts. The percentage of American debt is approaching eleven percent, larger than that faced by Greek and Spanish economies.
Current political paralysis is not a new phenomenon. US debt has already been downgraded once spurred by the government’s lack of action. The result was massive sell-offs, amid declining asset valuations, while average Americans kept their cash for a rainy day.
Positions in physical precious metals, like silver are the only real life raft in a sea of turbulent investment possibilities. Dumping threatened stocks or bonds for their cash equivalents may be a meritorious strategy, but maintaining a strong core of precious metals is essential for crisis investing.
