Most Republicans are pushing for a Balanced Budget Amendment as one of the ways to reign in spending, but without a corresponding monetary policy to support the amendment, the country will go into hyper-inflation. Unlike the 49 states that have a balanced budget amendment, none of them create their own currency, so they are forced to truly make difficult decisions and balance their budgets. However at the National level, the Treasury and Federal Reserve gives Congress an outlet to “balance” the budget by creating money out of thin air. The resulting bloat of the dollar supply in turn would feed hyper-inflation and cause a vicious downward spiral.
The new fiscal year is just 45 days away and the chances of passing a budget, much less a balanced one, is virtually zero. Instead of spending political capital on pushing a balanced budget amendment, the Republicans should push to reduce our military footprint around the world, specifically in Libya, Germany, Korea, Japan, Iraq and Afghanistan. Not only will bringing the troops back save many billions of dollars and enable our servicemen to spend their paychecks locally versus abroad, but it will also give the Republicans a negotiating stance with the Democrats to reduce entitlement programs in the upcoming budget battle.
In the meantime, precious metals such as gold and silver will continue to increase in value. I only wish I could use it to buy and sell items with.