AP News
CHARLES BABINGTON

President-elect Barack Obama says the nation probably faces huge deficits for years to come, but heavy spending is needed now to spur the economy.

Obama said Tuesday the deficit appears on track to hit $1 trillion soon. Speaking to reporters after meeting with top economic aides, Obama said: “Potentially we’ve got trillion-dollar deficits for years to come, even with the economic recovery that we are working on.”

He wants Congress to approve a stimulus plan of about $775 billion.

The federal deficit was about $455 billion when the last fiscal year ended on Sept. 30, 2008.

My comment: If you needed a reason to own gold you now have it. There is no way the world is going to finance trillion dollar US deficits year after year. Inflation and monetization will be the only way he will be able to accomplish this feat of lunacy.

Nick’s Comment: Watching Obama’s speech today was quite the spectacle. Obama actually called for Americans to “ignore” the deficit. It’s wild how Washington has used all of its tools to train Americans into thinking massive budget deficits won’t carry negative economic consequences. We will find out just how destructive the imbalances in forex markets created by our government can be.

Another point of interest was how BHO presented his speech as if this should be some sort of surprise. Isn’t Obama probably going to add an additional to $1 trillion to our deficit with this next stimulus package? If our deficit is already in the red, and you had $1 trillion to is, then it doesn’t take a rocket scientist to realize we will be running significantly over $1 trillion in the red for some time to come.

John Polomny
The Real Deal