The dollar is trading quite sadly. In the end the relationship with gold and the dollar is inverse.
Gold reflects the article below.
Budget deficit to hit $1.48 trillion
By Richard Cowan and Kim Dixon
WASHINGTON | Wed Jan 26, 2011 12:02pm EST
WASHINGTON (Reuters) – The U.S. budget deficit this year will jump nearly 40 percent over prior forecasts, mostly due to the mammoth tax-cut package brokered by President Barack Obama and lawmakers last month, the Congressional Budget Office said on Wednesday.
The CBO said the fiscal 2011 deficit will hit $1.48 trillion, up from last August’s $1.07 trillion estimate, which was crafted before Bush-era tax rates were extended at a cost of $858 billion over 10 years.
“The United States faces daunting economic and budgetary challenges,” the CBO said.
The new forecast is part of a semi-annual economic review by the CBO, the nonpartisan budget analyst for Congress.
The latest CBO estimates could exacerbate a deeply partisan debate in Congress and with Obama over the best way to tackle the $14 trillion federal debt.
Congress is grappling with spending levels for the rest of this year and committees are starting to look at budget blueprints and spending for fiscal 2012 as well.
In his State of the Union speech to Congress on Tuesday, Obama called for tackling the country’s fiscal problems through tax reform and a five-year spending freeze for many domestic programs, which he said would save $400 billion over 10 years.
Obama also warned the tax breaks for the wealthy that he went along with in December to win Republican support were unsustainable. More…
