US Budget deal & Gold.. you do the math
Its early breaking news but gold saw a small decline last night because it appears there may finally be agreement on a US budget… the first in years. To our early reading of it the excitement seems to be around reducing the deficit by about $22b over 10 years (that’s $0.022 trillion). They’ve run +$1 trillion deficits for the last 4 years yet gold sees declines because “it’s all ok now”. A (slightly) smaller deficit is still a deficit. ‘Tapered’ QE does not stop the money printing and accumulation of debt. Neither of these actually reduces the already out of control debt. They continue to ADD to it. And remember the debt is not the headline $17trillion. You must add the $65+ trillion in unfunded liabilities to that to get the real picture. Note this week we’ve seen large decreases in Dow Jones and increases in gold and silver prices. We think there is a move already from the bubble of equities to the cheap buying gold and silver based on a growing understanding.