Educational 1

National Debt can most certainly be used for the common good of all those living within the borders of borrowing countries. It has the potential to transform even the poorest of nations, by freeing up money in the short-term for governments to breathe life back into their respective economies. When soundly managed, it can undoubtedly increase National production, consumption, and most importantly of all ‘employment.’ However, the contrary is also true as it is frightening. When a country’s tax revenue grows weaker than its expenditures, a crisis is sure to follow. This is especially true if the period in question grows unduly long, in conjunction with ever-growing interest on Debts owed. Many counties, which have fallen victim to this absurdity, tend to borrow even more money or to have their respective Central Banks print money at will. These attempts, well-intended as it may well be, often cause more harm than good over the long haul.  

When a country’s National Debt spirals out of control, its import prices will grow exponentially and so too its unemployment. Worst still is the high probability that outside investors will take their money elsewhere; most likely never to return again. When enough countries spiral down this metaphorical rabbit hole, as the current global trend seems to be, a continuous cycle of global recessions could be imminent. When dealing with such matters, it’s important to find a rational balance between optimism and scepticism, for all is certainly not lost. Yet, the future painted by many well-respected world economists is bleak at best. Should their well-documented predictions, unnecessarily pessimistic as it may well seem, come to pass, the Demand for Gold will undoubtedly continue to rise and so too its price. For it remains an exceptional hedge against inflation and currency depreciation; having proven itself time and again to build wealth for its bearers, even amidst the most troubling of all times.