The Oligarchy Won, You Lost.

Yesterday was one of the saddest days in recent political history. The spectacle in Washington has demonstrated to the world that America does not have the will to get its fiscal house in order.

Holding U.S. debt is like picking up pennies from in front of a moving steam roller. U.S. bonds have lost 11% of their purchasing power over the last twelve months due to a declining dollar. Conversely, gold has gained 32% in purchasing power as central banks around the globe are adding to their gold reserves.

What's next?

1) The Federal Reserve will employ financial repression via low/negative real interest rates in an effort to keep the cheap money flowing to the Treasury.

2) The Federal Reserve will depreciate the currency so that the Treasury can pay back its debts with worthless paper.

3) The Congress will continue to borrow 40 cents of every dollar it spends. There is no other way to promise everything to everyone without cutting costs or raising taxes.

In other words, more of the same. The oligarchy won, you lost.