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Our top article this week looks at the astonishing fact that under the Tory/Lib-Dem coalition the national debt has risen by over 30% in just 20 months. Read that sentence again and let it sink in, the government that stood on a platform of getting the UK finances into order has increased the national debt by a third in under two years.
To put that 30% increase into perspective in the last 20 months of the Labour government they 'only' raised the national debt by 13%. As we've written many times last year there simply hasn't been any austerity in the UK and these national debt numbers should tell you that loud and clear.
We also got data from the ONS that the UK economy contracted in the final quarter of 2011. The usual suspects were out blaming the poor state of the UK economy on the 'austerity' enacted by the Tories. If there has been any 'austerity' we sure can't find - all we can find is a national debt exploding, rising taxes and much more spending. Is it not just as feasible to look to these factors as the reason why the economy is in such poor health as opposed to some mythical austerity that only seems to exist in the minds of the politicians.
Gold's 2012 winning streak shows no signs of letting up and the catalyst for the dramatic jump was word from the Federal Reserve that interest rates will remain at 0% until at least 2014 - this will mean 6 years of 0% interest rates. As we keep saying given the choice between inflation or deflation the powers that be will opt for inflation each and every time.
Gold is looking to close around the $1730/£1101 level - a rise of some 4% on the week. It also looks like gold will close at its highest levels for the week. Gold is only $20 away from erasing all of the drop in December.
We're right at some very interesting technical levels as the trading month draws to an end next Tuesday - look for an attempt by the bulls to secure a monthly close above $1755 next week.
It's also worth mentioning here that if € gold can close the month next Tuesday at these levels it will be gold's highest monthly close ever in that currency.
Silver continues to lead the way though. Last we noted:
"This will be silvers best close in 6 weeks and sets up an interesting week next week because the silver bulls look like they're back on the charge."
And back in charge they are - silver is looking to close out the week at $33.77 - it's best close since November 15th and a rise of 6% for the week. Silver is now up nearly 23% for the year. What a difference a month makes.
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