Not long after the State of the Union address, the Congress voted to substantially worsen that state, delivering a one-two punch directly at the value of the U.S. dollar. Not light jabs, but crippling body blows that will leave the prosperity of the American people reeling. The damage this combination of monetary and fiscal hits will do is being telegraphed in advance
When freshman Sen. Barack Obama said that a Bush debt-ceiling hike was a sign of "leadership failure," he was right. When Bush came into office the debt ceiling was less than $6 trillion dollars; it was $11.315 trillion when he went out the door. Bush presided over seven increases in eight years. In less than a full year of Obama's presidency, the debt ceiling was lifted twice. This new increase is his third.
Because long-term increases in sensitive barometers like the global price of oil and gold are a reflection of the world's assessment of the prospects for the dollar, a referendum on the U.S. debt and America's fiscal irresponsibility, it should come as no surprise that under Bush and Obama, increases in the national debt ceiling have been a harbinger of higher gold and oil prices.
Gold tells the story in detail. In November 2004, a Republican Congress under a Republican president raised the government's debt ceiling to $8.18 trillion. Gold was $434 that day. Sixteen months later, March 2006, the Congress voted to raise the debt ceiling again, this time to $9 trillion. Gold had moved up as well, to $556.
After the Republican majority had made a fiscal mess of things for a few years, and sent gold to $625....