Friday, January 29, 2010

High U.S. debt makes dealer gold more attractive for long-term

Investors got a new reason to consider investing in dealer gold this week from the U.S. Congress, which appears unlikely to take steps in the short term to deal with a rising national debt that has alarmed many economic experts.

Various media outlets are reporting that President Barack Obama is set to propose a three-year freeze in the growth of spending for many federal programs. However, on Tuesday he suffered a setback when a proposal for a bipartisan task force to try to reduce the deficit fell short of the 60 votes it needed for approval.

The proposed task force would have convened after the November elections to try to shield members from cost-cutting decisions that would have proven to be politically unpopular.

With efforts to reign in a deficit that now exceeds $1 trillion and a national debt that stands at more than $12 trillion, there is concern in many financial quarters that the costs of financing this debt alone will prove unsustainable in the long run, causing serious damage for the dollar's stability.

With this in mind, investing in gold and other precious metals can be a useful option when it comes to navigating any future economic uncertainty that may emerge.