Has anybody seen our missing $21 Trillion lying around?

Most of us are familiar with the $22 Trillion national debt that politicians of all stripes talk about, and which we mentioned earlier here. But many haven’t heard about the other $21 Trillion that has gone missing from federal coffers, currently unaccounted for, which politicians usually don’t like to talk about. While such discussions are sometimes chalked up as “conspiracy theory”, this large discrepancy was found by leading academics and economists, retired government executives, some in Congress, and at least one former presidential candidate. Unlike many accusations and allegations about malfeasance in Washington, this one is not political in nature. The missing funds disappeared during the reigns of both Republicans and Democrats. The important point now, is where did these funds go, and when (if ever) will they be restored? Has the bleeding stopped, or does the financial hemorrhage continue? What implications remain for precious metals, and the future of our financial system?

Unauthorized Expenses 54-Times Higher Than Entire Budget

Often when trying to track income and expenditures, there will be some portion of spending that might not fit into a preauthorized budget category. Some type of budgetary adjustment or other explanation is then necessary to account for the spending. This is true for a household budget, a corporate budget, and should be true for a government budget. Such undetermined expenditures should be a very small portion of an overall budget, or the budget was meaningless, to begin with. But when the unauthorized and/or unaccounted for spending is 54-times larger than the entire budget itself, there is a serious problem to solve. This was discovered by Ph.D. economists Mark Skidmore and Laurence Kotlikoff, as detailed in this article.

When the $21 Trillion missing funds began to be questioned, an audit was requested. Before the audit was completed, rules were changed to allow 154 government entities to misrepresent their expenditures for “national security” reasons. These government entities include generic departments such as HUD, the Dept of Agriculture, and many others that have little to do with national defense. A short video interview between veteran journalist Greg Hunter and Dr. Skidmore, discussing the missing funds can be found here.

In the beginning of this article, we asked if we would recover the missing funds and if we could expect more funds to come up missing. Unfortunately, the $21 Trillion missing was only from 2 departments, the Dept of Defense (DOD), and the Dept of Housing and Urban Development (HUD). With 154 total governmental entities covered by the federal accounting rules which allow them to conceal expenditures from the public, it is likely that there is an additional unknown amount of expenses yet to be accounted for. Furthermore, provision has been made in the new federal accounting guidelines for this type of spending to continue. This type of accounting will continue until there is a public uproar demanding accountability, or the financial system implodes, whichever comes first.

outstanding debt by sector

The $22 Trillion We Know About and Growing

There continues to be an appetite for spending in Washington, from both sides of the aisle. While the President proposes the largest budget in history, new members of Congress opposing him are proposing new spending plans that would require $600,000 from every American household to pay for. With the percentage of federal debt held by the public approaching the all-time highs last seen following WWII, Americans have a right to be concerned. Many nations that used to purchase and hold large amounts of US Government bonds have begun to slow purchases, and liquidate holdings. This means that either the American public must purchase the debt, to make up the difference. Americans, like many others around the world, are reaching the limit of their ability and/or desire to purchase more debt (govt bonds).

But even with debts rising more than ever before, expressed either as a % of national income or as a Dollar amount, the public seems less concerned. This is true for both Republicans and Democrats. Often, Democrats are more concerned about deficits and debt when the Republicans are in charge, and vice versa. But with President Trump in the White House, not only do Republicans seem less concerned about debt, but Democrats also appear to be less concerned than when President Obama was in office. Sometimes it is good to be concerned, which can help reign in unnecessary spending. Caution, it seems, has been thrown to the wind. With so little concern expressed by either side, who is minding the store?

deficit deduction

When it comes to debt and deficits, apparently no one is minding the store. When the way to deal with legitimate questions about missing $ Trillions is to change the accounting rules to keep the funds hidden, who knows what our true levels of debt really are in America. Many around the world can see the writing on the wall and are taking preventive measures to protect themselves from the coming fallout. Central banks are also purchasing precious metals in record amounts, and have recently changed the rules to recognize Gold as a primary asset on bank books.

Time to Protect Ourselves

The question we should all be asking ourselves as if the rulers of the financial system are purchasing Gold in record amounts, shouldn’t you and I be following their example? If the future was in paper financial instruments, why would they change the rules to make Gold a starting varsity player in the game of finance? Maybe the issue is not that they don’t want to explain what has happened to $21 Trillion; perhaps they are not entirely sure themselves. That would certainly be a “national security” issue, that would drastically affect the value of the American Dollar.

For the first time in recent history, the makers of $US currency are printing more $100 bills than $1 bills. One might think that $1 would be needed more often, but not when the value of the Dollar decreases to a certain level. In many respects, the $100 bill is the new $20. A trip to the grocery store will bear this out; the signs are all around us. Besides banks and governments, many people “in-the-know” have been purchasing gold and silver in 2019. So much silver, in fact, that the US Mint has run out of new coins twice so far in 2019. Thankfully there are other silver rounds, bars, and sovereign coins still available for the astute among us to consider.

 

Dollar Bills

When projecting gold and silver prices for 2019, we discussed the potential for premiums to rise, as available metal supplies become tight. With worldwide demand for precious metals continuing to rise, we expect premiums to begin climbing higher from where they are today. One way to avoid higher premiums is by purchasing gold now.