Will the USA Fiscal Cliff impact PMs ?

P

Photonaware

Active Member
Apparently December 31st is an important date for the USA.
The President has cut short his holiday to return to last minute debates.

Basically the SWHTF unless there is some last minute agreement and it is expected things will be taken to the wire.
Therefore in a matter of ~100 hours or so we may see some major fireworks and PMs could very well be in the line of fire.
Big question is whether that is up or down ?

Quoting from the BBC today -

"The US fiscal cliff represents the single biggest near-term threat to a global economic recovery," the Fitch ratings agency said recently.
"The dramatic fiscal tightening implied by the fiscal cliff could tip the US and possibly the global economy into recession.

"At the very least it would be likely to halve the rate of global growth in 2013."

"The IMF has warned that even the uncertainty raised by the fiscal cliff has hit global investment and job creation.
If the US actually fell off the cliff it could knock possibly four percentage points of growth off the US and undermine the fragile confidence in the rest of the world, it said"

"... the average annual tax bill for each American would rise by $3,500.
The super-rich face an average tax rise of $120,500 a year, while the lowest earners will see an increase of about $412.

For the middle earners - about 60% of the population - the TPC estimates that the average annual tax rise would be about $2,000."

No sympathy for the fat cats but it could be challenging for many ordinary folks - clock is ticking !!

Bit like waiting on the beach after a Tsunami warning - stay put and protect your assets or run for higher ground ?
 
I'm surprised I haven't seen this question addressed before. I'd love to hear people's thoughts on this..

Me.. I don't know the answer to this
 
The FC will impact the US economy 1.5T over 10 years. The debt will grow by 70T over the same time. So this is the pimple on the backside of Uncle Sam while the debt is the 600 pound gorilla sitting at the table.

This is all smoke and mirrors designed to mislead and confuse. Yes the FC may have some sort term impact, longer term it is irrelevant.
 
Taxes go up, taxes go down. I may see a little less in my paycheck or I may see less of a return. Either way, for most working people living within their means, it will be a slight personal budget adjustment.

Understand that what I am about to spew is what I know from watching our horrible news and not from actually researching anything.

The feeling I get living here, is that's it's all about Political power. Dems have put forth a plan and have made several changes to it to to try and appease the Reps. The Reps really do seem to not put forth any practical plan and what they have put forth appears piecemeal and they keep asking for the Dems to take their base plan and modify it for them.

But it's the Dems game to lose. If the Reps fail to act sensibly, regardless of how strongly they feel about their ideals, it is going to look very bad for them. Obama is going to let the country go over the cliff and then start pointing fingers loudly and boldly, because he has nothing to lose and everything to gain. The Dems will blame the next two years on the Reps and bring it all back up for mid terms and again in 2016. If whoever runs for Dem President wins in 2016, it could possibly cause permanent damage to the Reps.

I believe the Reps think it's unfixable and want Obama to force a plan that will fail and then they can blame him without ever putting anything on the line.

I am really surprised and disappointed the Reps haven't tried . Maybe it's intentional because there is no good answer, but at this stage, it seems like we really could cut a whole bunch of military spending and focus it internally, but there are too many Reps who think that helping the poor is bad, rather than trying to find a way to qualify it better. Yes, paying a single Mom more money for having her 5th child is ridiculous, but I can't punish the child by withholding the money from the Mother. There is middle ground here, but no one is working for it, since everyone is looking for the knockout.

As for silver... I would think that if the US economy goes down and the dollar loses value, silver would go up.
 
JoelAG said:
Taxes go up, taxes go down. I may see a little less in my paycheck or I may see less of a return. Either way, for most working people living within their means, it will be a slight personal budget adjustment.

Understand that what I am about to spew is what I know from watching our horrible news and not from actually researching anything.

The feeling I get living here, is that's it's all about Political power. Dems have put forth a plan and have made several changes to it to to try and appease the Reps. The Reps really do seem to not put forth any practical plan and what they have put forth appears piecemeal and they keep asking for the Dems to take their base plan and modify it for them.

But it's the Dems game to lose. If the Reps fail to act sensibly, regardless of how strongly they feel about their ideals, it is going to look very bad for them. Obama is going to let the country go over the cliff and then start pointing fingers loudly and boldly, because he has nothing to lose and everything to gain. The Dems will blame the next two years on the Reps and bring it all back up for mid terms and again in 2016. If whoever runs for Dem President wins in 2016, it could possibly cause permanent damage to the Reps.

I believe the Reps think it's unfixable and want Obama to force a plan that will fail and then they can blame him without ever putting anything on the line.

I am really surprised and disappointed the Reps haven't tried . Maybe it's intentional because there is no good answer, but at this stage, it seems like we really could cut a whole bunch of military spending and focus it internally, but there are too many Reps who think that helping the poor is bad, rather than trying to find a way to qualify it better. Yes, paying a single Mom more money for having her 5th child is ridiculous, but I can't punish the child by withholding the money from the Mother. There is middle ground here, but no one is working for it, since everyone is looking for the knockout.

As for silver... I would think that if the US economy goes down and the dollar loses value, silver would go up.
Click to expand...

This sounds pretty accurate to me. Basically taxes have got to go up, or spending has to take huge cuts. In reality we need both, but unfortunately, I don't see the spending slowing down. We have way to many people getting a free ride, and they make no attempt to better themselves, their situations, or their offsprings futures.
 
Suddenly now every little change in the US is being labelled a 'fiscal cliff'.

If it's just about taxes going up then how is that a 'cliff' ????
Higher taxes will slow down the real economy but it will take a long time to happen.
Hitting the debt ceiling might be a cliff but that can easily be raised like they did last time.


PM prices have more to do with how much spare fiat is floating around the system, and the fed is still printing billions every month and not stopping...
 
The US will find a last minute arrangement, the debt clock will begin another chapter upwards, PMs will continue to go up and down.

The Fiscal Cliff is irrelevant. The US will print until they literally can't - not because they elect not to.

Since the US CAN print their own currency at will, 'default' by running out of funds is not the likely outcome, rampant inflation is and that's not going to happen in the very short term (although it can take only a small period of time to achieve).

I believe the agreement (whatever it may be) will be reached and the printing press will go on because ultimately, there's nothing else they CAN do and keep the reins of power for themselves.

Photonaware said:
No sympathy for the fat cats but it could be challenging for many ordinary folks - clock is ticking !!

Bit like waiting on the beach after a Tsunami warning - stay put and protect your assets or run for higher ground ?
Click to expand...

This is a fallacy I believe. The people much further up the food chain have a lot more to lose than the common folk.

The 'ordinary folks' might get back something far more valuable, their individual liberty and true freedom.
 
Dec 31st... like all of these dates are self imposed deadlines... there's no external force preventig them fom blasting past this backstop.

They're not going to raise taxes in an economic downturn... not when they can print money.
They're not going to reducing spending in an economic downturn... not when they can print money.

The Fiscal Cliff means nothing...they're just going to print more money.

The US is in a non-shooting financial war with the Chinese. It started with the Hainan Island incident back in April 2001 when the US military was looking for a bogey man to go up against... trying to pick a fight with anyone to justify their existence.

The US is trying to kill it's dollar to undermine the Chinese economy. While the chinese has massive cheap labour force. They still don't have the 1st world infrastructure, education or energy security the US has. Sure this'll hurt the US...all wars do... but in a war of attrition, they'll be the survivors in the end.

So, in closing..the fiscal cliff means money printing and we all know what that means for PM's.
 
The world was supposed to end on December 21, 2012...

I don't think it will end January 1, 2013...

Keep stacking!
 
trew said:
Suddenly now every little change in the US is being labelled a 'fiscal cliff'.

If it's just about taxes going up then how is that a 'cliff' ????
Higher taxes will slow down the real economy but it will take a long time to happen.
Hitting the debt ceiling might be a cliff but that can easily be raised like they did last time.


PM prices have more to do with how much spare fiat is floating around the system, and the fed is still printing billions every month and not stopping...
Click to expand...

Don't quote me because I'm not an expert. But, I think you are looking at this the wrong way.

From what I understand fiscal cliff is the point of no return regarding US debt and the ability to pay it back(without printing extra money or anything). They are into so much debt that they cannot meet current obligations + interest repayments on curren debt( I hoped I got this right)

But as to the topic on hand, I believe that if there is a solution agreed upon that 'cleanly'(without printing money) addresses the problem that the price of PMs may fall or even remain static. If they fix the problem by printing money then they would be further devaluing the US dollar therefor pushing the price of PMs up. And finally, if they cannot find a solution (which I believe is impossible) then I think there will be a global pull back from the US dollar and a decent increase in PMs.

If this sounds silly at all, remember I'm not an expert and this is what I understand from limited information
 
DanielM said:
trew said:
Suddenly now every little change in the US is being labelled a 'fiscal cliff'.

If it's just about taxes going up then how is that a 'cliff' ????
Higher taxes will slow down the real economy but it will take a long time to happen.
Hitting the debt ceiling might be a cliff but that can easily be raised like they did last time.


PM prices have more to do with how much spare fiat is floating around the system, and the fed is still printing billions every month and not stopping...
Click to expand...

Don't quote me because I'm not an expert. But, I think you are looking at this the wrong way.

From what I understand fiscal cliff is the point of no return regarding US debt and the ability to pay it back(without printing extra money or anything). They are into so much debt that they cannot meet current obligations + interest repayments on curren debt( I hoped I got this right)

But as to the topic on hand, I believe that if there is a solution agreed upon that 'cleanly'(without printing money) addresses the problem that the price of PMs may fall or even remain static. If they fix the problem by printing money then they would be further devaluing the US dollar therefor pushing the price of PMs up. And finally, if they cannot find a solution (which I believe is impossible) then I think there will be a global pull back from the US dollar and a decent increase in PMs.

If this sounds silly at all, remember I'm not an expert and this is what I understand from limited information
Click to expand...


"From what I understand fiscal cliff is the point of no return regarding US debt and the ability to pay it back(without printing extra money or anything)."

We passed that point a long time ago. QE1, QE2, QE3, QE4 as well as Twist 1, then Twist 2 are all printing money or anything? The game is over, it has been over for a long time. It is like a cancer. You diagnose it early and in some cases it can be cured by radical therapy. Wait longer, do nothing avoid the painful medicine and you pass the point of cure. That does not mean you die immediately, no you are initially without any symptoms, then slowly over time you start to develop problems which get harder and harder to treat. Until all of a sudden it is all over. That is the nature of exponential growth whether it is money, debt or cancer cells.
 
I think it will impact silver negatively, because if the Fiscal Cliff comes into effect, the US deficit is automatically reduced, which means less US Gubbermint Bonds need to be monetised, which means less inflation (potentially).

Meanwhile though, it will cause a decline in the value of the AUD vis a vie the USD, so the net-net effect to us in terms of the value of our silver could be anyone's guess.
 
short term I think it will be negative. Long term I believe it will lead to further money printing which should, in theory increase pm prices. But the market is so manipulated that who really knows qhat will happen.
Like any investment nowadays its a crap shoot.
 
Not much long term anyway. If the guy went on holidays something has already been sorted, what we are seeing is just a drama/soap opera.
I think we will see a bigger impact on PMs when the debt ceiling issue comes up.
 
The fiscal cliff will have little effect. As mentioned above, it's a completely self-imposed limit. There will be a deal eventually, whether it's before or a week after. A lot of people think various groups want to go over the cliff for various political reasons.

I think we'll see volatility in the markets as it becomes a will they, won't they situation but eventually there will be a deal and everything will be "fine".

More worrying for me, is what the deal actually entails. Most likely it won't actually fix the problem, just put it off, which is worse for the economy in the long run.
 
Sort of related considering the US debt ceiling debate in congress is also basically up, but what was the impact on silver during the last debt ceiling crisis? Is it likely to repeat?
 
Perhaps they are going to use this latest one as a lesson as to why they should have no debt ceiling at all.
 
You must log in or register to reply here.
Back
Top