Dear President Obama, I think it is safe for me to say that your reelection in 2012 is in grave danger. The capacious bill of particulars I will leave to others to catalogue and debate. The price of gold, interest rates, the strength of the dollar, elements of my solar system - finance, and their subsequent future rests in part on the national debt’s gravitational pull on money. At $12 trillion dollars and growing, and an arrested and decaying GDP, not thinking out of the box to attack this problem, sir, is not an option.
The New York Times front page story today brought into focus this underreported but not intractable problem. Your Democrat-controlled congress will most surely spread some money around in the economy next year before the November elections, thereby, pushing the dollar (NYSEARCA:UDN) lower still and sending the price of gold (GLD, IAU, and SGOL) ever closer to $2,000 an ounce. Mr. President, do wish to preside over the first credit rating downgrade experienced by the USA in modern history?
An unorthodox solution (read change) to confronting this phantom menace is with an innovative Cash-for-Citizenship Program. Follow me here for a second with a back-of the-envelope calculation. If you reject this idea out of hand be prepared to prioritize raising taxes, cutting expenses, debasing the currency, creating a large surge in growth, or default.
Currently, there are 307 million Americans and a world population of seven billion people. Selling one million citizenships a year, after a thorough background check, at $1 million dollars each, is $1 trillion dollars, annually. To put things into perspective, Michael Jackson’s sequined-glove just fetched $420,000 grand in a charity auction, from a Hong Kong buyer last Saturday, in New York City, so there’s plenty of loose cash around the planet. Let’s unbutton this meme to congress in the elevator and see if they exit on their floor.
Five trillion dollars over the next five years will help pull your reelection and the nation’s debt woes out of a growing sinkhole. Additionally, if our new comrades-in-cash need shelter, for a small addition fee, they can choose a fine residence from the Fannie Mae (FNM) or Freddie Mac (FRE) inventory of recent foreclosures, furthermore, turning sub-prime lemons into lemonade. One hundred years ago, we embraced emigrants coming to America because we needed their strong backs, their tireless muscles, and their dream of a better future. Today we need their Platinum and Black American Express cards and their children’s 1,600 SAT scores.
This audacious idea will bend debt servicing away from a sure disaster. Like Beckham, you can score against the deadly debt monster with its toxic interest costs that’s lurking outside the economic recovery’s door and your reelection bid. Otherwise, the greenback, currently posing as a currency piñata, will continue dancing the international Limbo, long after you leave office.Disclosure: GLD, SIVR, SGOL