"Today
John Hathaway spoke with King World News about why gold is
headed substantially higher in 2013 and the years beyond. The four decade veteran and prolific
manager of the Tocqueville Gold Fund also believes money will continue flowing
into physical gold from around the world. Here is what Hathaway had to say:
“Well, to me the imperative to hold gold is stronger
than ever. The current effective interest rate on the $16 trillion of US debt
outstanding is less than 2%. That’s partly because the Fed remits interest back
to the Treasury on the bonds it owns, and last year that number was almost $90
billion.”
John Hathaway
continues:
“Should the Fed ever divest their bond holdings,
which I don’t think they can ever possibly do, but even if interest rates stay
at 2% or 2.5%, that’s $90 billion the government is going to have to start
paying that they haven’t had to pay.
If we ever see a 300 or 400 basis point rise in
interest rates across the yield spectrum, and multiply that times $16 trillion,
that’s another $600 or $700 billion additional to the deficit we (already) have
right now...."
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