The federal government began the new budget year with a record deficit of $237.2 billion, reflecting the billions of dollars the government has started to pay out to rescue the financial system.

The Treasury Department said Thursday that the deficit for the first month in the new budget year was the highest monthly imbalance on record. It was far bigger than analysts expected, over four times larger than the October 2007 deficit of $56.8 billion, and more than half the total for all of last year.

The October deficit began a period in which economists are forecasting the red ink for the entire year could well hit $1 trillion, reflecting what many expect to be a severe recession, which will depress tax revenue, and the heavy costs of the financial system bailout.

President-elect Barack Obama has said that getting the economy back on track will be his top priority and has promised to work with Congress to pass a second stimulus program.

My comment: The US is broke so who is going to loan us the money for these stimulus packages. By the way here is one of the main problems with our country. The President elect says his top priority is to get the economy back on track. Its not his job to get the economy back on track. What can he do except raise taxes (fat chance), sell more bonds (who will buy them), have the FED monetize the debt (throw the dollar under the bus and get inflation). This guy’s Presidency is over before it even begins. What he should do is cut taxes, bring all troops home from overseas, massively shrink government, and let the free market rationalize these mal investments. However if thats what Boobus wanted he would have voted for Ron Paul not an inexperienced unaccomplished first term Senator who is all show and no go. Do what is right and what is required and not what the mob clamors for? Ain’t going to happen so expect a lower standard of living for most people, higher inflation, and a lot of pissed off people who start acting out.

Oh by the way:

South African gold production down 17% yoy

South African gold output fell 17.7 percent in volume terms, while overall mineral production was down 3.5 percent in September compared to the same month in the previous year, official data showed on Thursday.

Production of non-gold minerals declined by 1.2 percent, Statistics South Africa said on its website www.statssa.gov.za

South African mine output has fallen after state-owned power utility Eskom suffered a near collapse in the electricity grid in January.

Eskom has since supplied around 90 to 95 percent power to mines in the country, the world’s biggest source of platinum and the second-ranked gold producer.

John Polomny
The Real Deal