From the Gainesville Coins website:
There are 9 days before the congressional super committee tasked with $1.2 trillion in deficit reduction over the next decade is set to hit its first deadline. Created as part of the 2011 Budget Stability Act, the job of the bipartisan committee is still far from complete as partisan bickering prevent any real progress. No surprise, Democrats are demanding revenue increases while Republicans are refusing any increase in taxes. Really?
With the level of partisan politics seemingly rising with the addition of highly inflexible tea-party Republicans, the ability of Congress to get anything done continues to decline. Without any propensity to compromise, the possibility that the super committee gets nothing done is high. The consequences would be unpleasant. The Budget Stability Act mandates automatic cuts of $1.2 trillion to discretionary programs, including the military, if no propsals are put forth.
Since it would be politically unacceptable to Republicans to reduce military spending, and since across the board cuts in discretionary programs would be unacceptable to Democrats, it would appear that some sort of compromise should be found. The next ten days will show America how dysfunctional its government is.
For precious metal investors, cutting $1.2 trillion over 10 years is laughable. In 2011, the Federal deficit was $1.3 trillion – more than the $1.2 trillion lawmakers are trying to cut over 10 years. In fact, 2011’s deficit was virtually identical to 2010. Furthermore, with GDP forecasts for 2012 being slashed of late, the possibility of another $1 trillion-plus deficit cannot be ruled out. With Europe clearly heading into recession, the headwinds to government finances are clear.
What does this mean for gold and silver investors? Well, one would say that the USD is bound to weakend in the face of this uncontrolled spending. Even if the super committee were to agree to a series of deficit reduction measures, the size of the deficit is ludicrous. As has been well documented, the negative correlation between the USD and gold and silver remains a dominant theme.
For investors seeking to add to their gold and silver holdings ahead of the upcoming Congressional circus, take advantage of Gainesville Coins offer on 1oz PAMP gold bars at just $14.99 over spot. Gainesville is also offering the 10oz NTR silver bar at as low as $0.59 over spot.