by MJ Harris

The latest numbers show that the US trade deficit had widened again this month. Instead of Americans spending less and saving more so that the trade deficit can shrink, the government is encouraging more spending so the trade deficit is actually expanding.

There is still alot of uncertainty surrounding the Greece and the Eurozone ‘PIGS’ bailouts. (This is how the financial markets are refering to the heavily-indebted countries of Europe: Portugal, Ireland, Greece and Spain.) Causing temporary flight back to the dollar. Bringing it to its highest levels in several months. These bailouts are bad for the economy as a whole because it promotes reckless behavior and rewards those who took on too big risks, with no regard for consequences.

This also sends messages to surrounding countries that they don’t need to reign in their risky behavior as well because no matter what happens they will be able to get bailed out.

“The problems we see in Europe will be coming to the United States soon at the state levels.”

Senate Candidate Peter Schiff recently said in an weekly podcast “In the end the federal government will come to the rescue with bailouts and that is going to lead to more reckless spending and even more risky lending by institutions because they feel like they will eventually get bailed out themselves.”

We know that the federal government is approaching bankrupt as well, as it continues to raise the federal deficit ceiling.

While the dollar has seen a temporary boost while others countries are in a state of panic, there is still a day of reckoning coming for the US dollar. We have been borrowing more and more money, however we aren’t spending money on productive things. Instead the majority of money is “blown” away in the middle east, while the rest is sucked down the drain of endless pension benefits for people who are no longer working.

The artificially high levels of the dollar have provided a great opportunity to buy gold. Just a few months ago gold was breaking records every week. Now it has pulled back off of those new highs, providing a good price to buy more. The new strength in the dollar should be short lived because Washington continues to run the printing press around the clock. Which will eventually create another round of new highs for gold in the years to come.

Disclosure: This article was sponsored by Goldline International. Without our sponsors The Liberty Guardian could not continue.

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