Gold hits record near $1,500 after S&P cut

[Viva_La_Revolution]

Source: Reuters

Gold prices rallied to a record high $1,497.20 an ounce on Monday after Standard & Poor's downgraded its credit outlook for the United States and as investors worried about debt in the euro zone and inflation in China.

S&P said it might cut its long-term rating on the United States within two years, prompting investors to buy gold as a hedge against economic uncertainty. The ratings agency cited a risk that policymakers may not reach agreement on a plan to slash the huge federal budget deficit.

"The U.S. debt situation got a reality check this morning from the move by S&P," said John Kilduff, a partner at Again Capital in New York.

"Only precious metals will be seen as attractive in the aftermath of the outlook downgrade. The overall economic outlook becomes more opaque with this; equities and energies will be very much under pressure now," Kilduff said.

Read more: http://www.reuters.com/article/2011/04/18/us-markets-precious-idUSTRE73786N20110418

[xchrom]

1. recommend

[Poll_Blind]

2. Stop. The. Effing. WARS.

PB

[melm00se]

7. according to the Center for Defense Information

the 2010 cost of Iraq/Afghan wars is approximately $170B.

This years federal deficit is what? $1.3Trillion?

stop the wars and the US federal government is still more than a $1.13T in the hole.

wipe out 100% of defense spending (a completely foolish notion) and you are still $440B in the hole.

Gotta newsflash for everyone who reads this but disagrees with the downgrade:

Everyone BUT you gets it.

The US Federal government is approaching the budgetary tipping point.

Unless something is done the US federal government will topple over the precipice.

To correct this, it will require more than cries of "tax the rich! tax the rich! tax the rich!". There must be cuts made on spending and some of those cuts will come at the expense of social programs.

[HankyDubs]

8. it will require more than cries

it will require more than cries of "tax the rich! tax the rich! tax the rich!"

Yeah you actually have to follow though and DO IT. What a sophomoric way to reject the clearest solution to the problem!

[Poll_Blind]

9. You...reject my argument because it does not solve the problem completely?

Really?

:shrug:

PB

[plumbob]

11. But this war didn't start in 2010, did it?

Here's the actual cost of the wars from the beginning:

With the July 27, 2010 enactment of the FY2010 Supplemental Appropriations Act (H.R. 4899/P.L.
111-201) Congress has approved a total of $1.121 trillion for military operations, base security,
reconstruction, foreign aid, embassy costs, and veterans’ health care for the three operations initiated
since the 9/11 attacks: Operation Enduring Freedom (OEF) Afghanistan and other counter terror
operations; Operation Noble Eagle (ONE), providing enhanced security at military bases; and
Operation Iraqi Freedom (OIF).

http://www.fas.org/sgp/crs/natsec/RL33110.pdf

So nearly 10% of the total debt of the US is taken up by just these operations.

Don't know why wiping out the War Department would be bad - this country never had a standing army until after WWII, and we seemed to make it all right.

If we had done that 10 years ago, we'd have saved $8 trillion +, about 60% of the current debt of the US.

[HankyDubs]

14. not to mention

If we had done that 10 years ago, we'd have saved $8 trillion +, about 60% of the current debt of the US.

Not to mention all the interest paid on this debt to date.

[plumbob]

15. Yep, not to mention.

It would be around $2 trillion additional savings.

[NeoConsSuck]

19. Nice try, but no cigar

You look at a *one year cut* in defense spending, and say it won't close the deficit. What happens if you cut 300 billion per year from the budget over ten years? Three trillion.

It is not a military defense budget. It is a military OFFENSE budget. You don't use a scapel on that military budget, you use a chainsaw.

[dipsydoodle]

3. Hardly surprising

People default to faith in alternatives where the supply can't increase overnight.

[moondust]

4. It's only up 8.49 right now.

I've seen it rise or fall 15 or 20 in a day a number of times in the past so this is really not extraordinary as this article would have us believe.

[golfguru]

5. Gold has to hit $2500 to equal the previous high

Inflation adjusted in buying power, previously reached during
the Carter Admin.

[jsamuel]

6. its not the debt, its the dept ceiling they are worried about

[Cali_Democrat]

10. I've been buying gold and silver lately to hedge against Ben Bernanke's endless money printing....

...and resulting inflation.

No way am I gonna let that fucker make me poorer as he turns on his printing press.

[safeinOhio]

13. sold 6 ozs today

at $1507.67/oz. Bought at $650/oz in 2006. I'm ready for the bubble to pop.

[Cali_Democrat]

16. I'm also probably gonna take some of my gains off the table...

...just to be safe. In just a few months silver went exponential.

[safeinOhio]

18. I sell to

Northwest territorial Mint in Washington State. They pay over spot and I have had very good service from them. Most buyers want to TAKE a premium off the spot price. Beware of pawn and coin shops.

http://bullion.nwtmint.com/gold_americaneagle.php

[Dark]

21. Inflation isn't the problem. Deflation is the worry.

The commodities that are experiencing price jumps are Historically volatile. The ones resistant to price jumps due to market volatility are the ones that soar under inflation.

They are relatively stable. Read krugman for more

[plumbob]

12. S&P decided to make some gold dealers a little richer?

MIGHT cut within TWO years, blah, blah, blah.

From the same folks who certified junk mortgages as AAA prime.

Drive the market down until the folks who want prices lower are happy and start to buy at garage sale prices.

Scam, like all the so-called financial markets. At least at a real casino, you can get free drinks and a show ticket when you lose your money. With these bastards, you just get an insult to your intelligence.

[Pryderi]

17. Maybe the the gov't should pay them off and get a better rating.

[Courtesy Flush]

20. We should have listened to Glenn Beck

Run for your lives!

[Javaman]

22. Still can't eat gold.

if the economy collapses, a head of cabbage will be worth more than an ounce of gold.

[KillCapitalism]

23. I agree with you.

If we have a total & complete worldwide economic collapse, gold and silver will just become useless metal.

What will be valuable? Clean water, food, generators, even toilet paper.

[Javaman]

26. I plan on cornering the toilet paper market. ;) nt

[ret5hd]

24. Can't eat a quarter or a dollar bill either.

And in your scenario, a laying chicken would trump a head of cabbage.

[Javaman]

25. Yes it will. nt

[Vinee]

27. the economy would have to collapse in a "Mad Max: Beyond Thunderdome" kind of way for that to happen

and as long as the US govt. can print money, there's little chance of that which is what the gold bugs are banking on. They know that the US Govt. will ultimately just print more money to avoid total economic meltdown which will drive the price of all commodities, be it gold or cabbage, higher.

[Javaman]

28. nope, just a healthy dose of inflation will do it. nt