Asia market responds well:
http://finance.yahoo.com/intlindices?e=asia
GOLD's down, now 1611.
I think the market is still trying to digest this news. It's a deal but it's like to deal. It really doesn't resolve anything, except raising the debt ceiling.
Nothing about additional income for the government. No new tax income.
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It's all about cutting spending, but only $1 trillion over 10 years, or just $100B a year, while the US has $1500 B deficit a year.
It's a reduction of 7% of the DEFICIT. What's about the rest 93% of the DEFICIT?
About additional 15% of the DEFICIT will be cut by a special committee, to be appointed soon, to come up with a cut plan by the end of the year.
Assuming the committee is successful, so what, 22% cut in DEFICIT, nothing about the rest 78%!
In the best scenario, the US will still be at about $1200 B deficit a year!
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FED will still have to give itself at least $500 B a year in the next 10 years, to say the least.
While the US will owe additionally $14,000 B in the next 10 years, to make it $28,500 B national debt in the year 2021.
With this burden, it's rightful that the US should be given lower sovereign credit, and thus ALL Americans will have to pay "bad credit tax", in the form of higher interest rate, higher price for everything, in addition to the INFLATION caused by FED's QEs.
But that's the worry later, right at THIS MOMENT, the market breathes easily, cuts down gold price, raises up USD value. Maybe for a few minutes, or few hours, or a day, who knows.
Originally Posted by Dr_Tran
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