The folks at Agora Financial and their 5 Minute Forecast are shedding light at the budget deficit will be in fiscal 2010. Check out these numbers! Folks, deficit numbers like this should cause concern. They should make you run to safe haven gold.
As if to prove the above thesis, the U.S. Treasury just came clean on how much of a deficit it ran during fiscal 2010. It's only 61% higher than the official figure.
The annual Financial Report of the United States Government came into being under Paul O'Neill, who you might remember from I.O.U.S.A. He was the Treasury secretary thrown overboard by Dick Cheney for having the temerity to believe deficits do matter.
The report applies generally accepted accounting principles to Uncle Sam's books -- you know, the ones you have to apply in the private sector on pain of severe penalties.
That means Treasury took into account things like...
- Hefty increases in costs accrued for veterans' compensation
- Government and military employee benefits
- Anticipated losses at Fannie Mae and Freddie Mac.
Factor those in and the deficit came in at $2.08 trillion... just a wee bit over the figure splashed all over the media a few weeks ago, $1.29 trillion.
But it's even more fugly than that.
Broader GAAP-based federal deficits, including the Social Security and Medicare unfunded liabilities, have been in the $4-5 trillion range in 2008 and 2009, says ShadowStats.com's John Williams. And 2010's deficit again likely was near $5.3 trillion, remaining both uncontainable and unsustainable.
By this yardstick, you could eliminate all government spending except Social Security and Medicare and there'd still be a deficit.
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