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Therefore expect a significant additional rise in the Federal Budget deficit as the smoke and mirror recovery fails. What else do you need to know as gold goes to and through $1650.

Jim

Jim,

We need to do something about this problem, the ever growing debt monster, but not right now. It's called acknowledge the can but kick it down the road further rather than pick it up.

Eric

Bernanke Defends Increase in Deficit but Offers Warning

The chairman of the Federal Reserve, Ben S. Bernanke, warned on Wednesday that "the federal budget appears to be on an unsustainable path," but also recognized that the "exceptional increase" in the deficit had been necessary to ease the recession.

The can kicked rather than picked up, because they know it will blow up in their hands. The economy, under the weight of the debt implosion, remains in deep trouble. As the following headline suggests, it needs more official stimuli.

Bernanke Says Fed to Take Necessary Steps on Growth (Update2)

Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis.

The Weimar Republic continues to unfold in plain sight. Aggressive devaluation, lead by deterioration in confidence in the fiat system, will send gold beyond $1650 and stocks higher.

Downside force in small cap stocks, the previous market leaders and most sensitive to devaluation, continues to wane as the June cycle date approaches.

U.S. Small Cap Stocks ETF (IWM):