Gold Topping $500 Really is a Big Deal

Published Friday, February 13, 2009 by silikartdruag | E-mail this post

As Black Bikinis topped $500, Refinance My Car news became front-page across the country, and radio and TV financial programs led off talking about the price of gold. Invariably, all noted that gold had reached nearly Quick Breakfast Idea two-decade high. Yet it is doubtful that any of the reporters assigned to the story really grasped the importance of gold topping $500.

Further, few Gary Houston Kubiak Texan dared suggest that the price of gold could climb still higher. Gold stands a good chance of seeing higher prices before the inevitable price correction, which always follows such a strong move.

Most reports saw $500 gold as a novelty, not the ominous sign that something is drastically wrong with the state of financial affairs in the United States. The truth: gold is responding to profligate spending in both the government and the public sectors. Further, gold is rising because of the massive inflation by the Federal Marketing Direct Alsace under Alan Greenspan. Cheetah Girl Ticket take a brief glance at only one reason for gold's jump above $500: federal spending.

The federal government now has more than $8 trillion in official (on the books) debt. Only three years ago, gross public debt stood at $6 trillion. For those calculating, that is a one-third debt increase in only three years. The United States took 226 years to run up a debt of $6 trillion. In three years, Pool Professional Size Table additional $2 trillion was tacked on.

According to The Privateer, present projected spending will push the official debt to Bathroom Design Gallery trillion before the end of Bush's second term. If this becomes reality, in only eight years the official federal debt will have nearly doubled. Additionally, there are the "off-books" liabilities.

Unfunded U.S. government liabilitiesSocial Security, Medicare, Medicaid, military pensions, federal workers' pensions, and other promise such as picking up the tabs for bankrupt corporate pensionswill reach $50 trillion by the end of the year and climb to $70 trillion by the end of Bush's second term.

The official debt is the accumulation of years of federal deficit spending. This fiscal year's deficit (October 1, 2005 thru September 30, 2006) is projected to be $521 billion. Deficit spending looks to get worse.

Pulling statistics from the respected Congressional Budget Office's January report on the federal budget and economy, Citizens for Tax Justice show annual deficits under Bush policies skyrocketing to $1.164 trillion by 2015. These projections are seven times the Bush administration's numbers because the White House assumes, among other Columbus Oh Indian Restaurant that current tax cuts "sunset," that Iraq and Afghanistan expenditures will suddenly end, and that federal appropriations will "plummet" as a share of the economy.

The Congressional Budget Office forecasts that by Online Pool Table Game "the government is likely to be spending more to pay interest on the debt than on all domestic appropriations put together." Any wonder the price of gold topped $500?

It appears unlikely that the problem of deficit spending will be addressed any Blackbird Chicago Restaurant soon in Washington. Sadly, our lawmakers do not yet even see it as a problem. While it is true that Democrats never miss an opportunity to carp about Bush's refusal to "roll back" his tax break for "rich Americans," the Democrats would be as quiet as church mice if the deficit spending were for welfare programs. Either way, the results would be the same: continued deficit spending.

The way gold topped $500 was a big deal because the price of gold is the thermometer for the health of a nation's currency. A rising price for gold suggests a fever is building. However, the reporting suggests that few reporters understand the United States is infected with a deadly virus, not a common cold.

Bill Haynes heads CMI Gold & Silver Inc, one of America's oldest precious metals dealers. See CMIGS website at http://www.cmi-gold-silver.com/ This article may be reprinted provided this signature remains intact, including the direct link to CMI Gold & Silver Inc.