Commentaries on developments that affect gold and silver prices | CMI Gold & Silver
Monday, November 29th, 2021 MST

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America’s debt ceiling: What happens if Congress fails to raise it?

In October, the US government will be unable to pay it bills if Congress does not raise the debt ceiling.  The debt ceiling is the legal cap that Congress sets on the amount that the Treasury can borrow.

Since 1960, the debt ceiling has been raised 78 times. During Donald Trump’s presidency, the ceiling was raised three times.  Further, the Democrats agreed to a two-year suspension of the ceiling as part of a budget agreement in 2019. Since the suspension expired in late July, the Treasury has been taking “extraordinary measures”, which includes suspending investments in some federal retirement and disability funds, to conserve cash.

Janet Yellen, the Treasury Secretary, has since warned that failing to raise the ceiling would result in “economic catastrophe,” with perhaps soldiers and pensioners going unpaid.

The long-term consequences of defaulting on Treasury securities could be more harmful as the dollar is the world’s reserve currency and much of the global financial system is built on the assumption that Treasuries are risk-free. The last time America flirted with a default, Standard & Poor’s stripped US of its AAA rating.

Democrats plan to introduce a bill to lift the debt ceiling, extend government funding through December and pay for relief from recent natural disasters. Senate Republicans say they will not approve an increase, but Democrats want to test that resolve.

Democrats believe Republicans will cave rather than cause a default and government shutdown, and they also believe they may be able to pick up a few votes from Republicans representing states hit by hurricanes.

Republicans want Democrats to pass the bill on a party-line vote, which and paint Democrats as the party of irresponsible spending.

Regardless, as October approaches and the topic of raising the debt ceiling—and the consequences of not doing it—gets discussed, we can expect increased interest in gold and silver.

Secretary of the Treasury Janet Yellen letter to Nancy Pelosi

September 8, 2021 The Honorable Nancy Pelosi Speaker U.S. House of Representatives Washington, DC 20515 Dear Madam Speaker: I am writing to follow up on my previous letters regarding the debt limit and to provide additional information regarding the Treasury Department’s ability to continue to finance the government in the absence of Congressional action to

World gold production declines

When I visited South Africa in 1979, it was the world’s largest gold producer, mining some 1,000 tons a year.  Today South Africa is not even in the top 10 gold producing countries. Between 2010 and 2018, the world’s gold production grew by 2.5%.  However, over the last two years, production has fallen by 4.78%. 

In case you’re wondering. . .

. . . just how much individual families will receive from the recently passed $1.9 trillion COVID stimulus bill, here is what a married couple earning $150,000 with 2 children will receiv: Six checks at $1,400 each: $8,400; Two childcare credits at $3,600 each: $7,200; Two child credits at $3,000 each: $6,000; Total walking around

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