In this week's talk with Tom Cloud of National Numismatic Associates, he explains why the upcoming debt limit negotiations are a bigger deal than the fiscal cliff for precious metals.
DollarCollapse: Hi Tom. How's business? Specifically, what are your customers thinking about?
Tom Cloud: The phone is ringing off the hook. Our customers are less concerned with the fiscal cliff being kicked down the road than with the fact that the debt ceiling is just a couple of months away. I'm also hearing a lot of complaints about president Obama cutting the fiscal cliff deal and then immediately charging taxpayers $3 million to take him and his family to Hawaii.
One other thing that's leading a lot of people to look at precious metals is the recent announcement that Japan is buying almost as many US Treasury bonds than China, and now has over $1 trillion worth. When those two decide to sell, which they will eventually, it will be a nightmare.
DC: Didn't we just raise the debt ceiling?
TC: The last debt ceiling battle was in August of 2011, and they said it would last two-plus years. And now they're having to raise it again already. A Korean economist named Dr. Yoo published a chart showing an almost perfect correlation between the debt ceiling and gold. If this relationship holds, raising the debt limit by another $2 trillion would put gold at $2,000 an ounce. ...