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U.S. Debt, Inflation, The Dollar Crisis and Interest Rates

Listeners’ Questions, Peter’s Answers Audio- May 11, 2012

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Santhosh from Dublin, OH
Recently I read an article saying that the US faces a big risk in 2013 as there is a spike in the amount of treasuries that are maturing. Is that true? I also read that the US rolls over debt every year in the trillions. How is this possible without someone buying the new debt? Isn’t rollover the same as defaulting?

Dylan from Winnipeg, CA
Can you explain the difference with respect to the rate of inflation between the following 2 scenarios: 1) All of a government’s debt is bought by its own central banks…and 2) All of a government’s debt is bought by foreign central banks or private investors. Isn’t who buys the debt less important than the amount of deficit spending?

Lim from Selangor, Malaysia
The US $ is continuing to devalue and it’s mathematically inevitable that the US $ will go into the abyss. If one day there’s a huge panic on US $ that results in capital flight, will the USD’s crisis drag other currencies downward as well? And will it affect my country Malaysia?

Mohamad from Beirut, Lebanon
I have a question regarding the worldwide real estate bubble. In countries where the bubble has not burst yet and with tight lending standards, no subprime, high population density, few areas left to build in urban areas accompanied by high population growth rates; how do you expect the bubble to burst as interest rates rise? Or will real estate prices only go down in terms of gold and silver and not in US $?

Daniel from Chicago, IL
Purchasing gold inventory from the Perth Mint sounds like a good idea but I’d prefer storing the metal locally so I can actually pick it up or have it delivered as opposed to holding a paper certificate for unallocated gold. Do you recommend any storage facilities in the US? Also, should I be concerned about my gold stocks if my broker/dealer goes bankrupt?