Is Silver the new Gold?

5.11.23 - Is Silver the new Gold?

Gold last traded at $2,014 an ounce. Silver at $24.19 an ounce.

"Weird Gold Trick" Could End Debt Ceiling Showdown -Daily Reckoning

The government may again be using gold to their advantage. The US government has a pretty consistent track record of using the yellow metal to bail themselves out of bad fiscal policy. It just goes to show, in times of financial distress gold is the place to be.

The phrase "X-Date" may remind readers of the TV drama The X-Files or the superhero X-Men. It actually refers to the date when the U.S. Treasury goes broke.

The problem arises from the fact that issuing U.S. Treasury debt beyond a certain ceiling requires approval from the U.S. Congress. The amount of outstanding debt today is at the current debt ceiling.

The Treasury is allowed to issue new debt to roll over maturing debt as long as the ceiling is not breached. Since the U.S. is running large budget deficits, the Treasury has to increase the total amount of debt outstanding in order to pay the government's bills for everything from F-35 fighter jets to food stamps.

Treasury has already hit the debt ceiling but has been able to scrape by with some positive cash flow (due to tax payments around April 15) and some other revenue sources including excise taxes and tariffs.