CUT, CAP AND BALANCE BILL REJECTED
As expected, the “Cut, Cap and Balance” bill passed by the U.S. House of Representatives failed to make it through Senate today. The bill, which would have allowed the debt limit to be raised only with corresponding spending cuts and an amendment to the Constitution requiring a balanced budget, was defeated by a vote of 51-46. The deadline to raise the debt limit is little more than a week away, and President Obama and House Speaker Boehner continue to work on a deal that both sides can agree to.
The agreement on an aid package for Greece has resulted in a gain for stock markets overseas. The package, which provides 109 billion euros in aid while also lowering the interest rates that Greece (and Portugal and Ireland) is required to pay its creditors, drove markets higher in Japan, France, and the United Kingdom. Stocks in the U.S. were seemingly unaffected, however, as most investors are concerned with the ongoing debt ceiling talks. Meanwhile, some economists are warning that while the Greek bailout agreement will likely curb any more drastic increases in that country’s debt, it won’t be a cure-all, and Greece will continue to deal with its debt issues for many years to come. In a recent report, Paul Donovan, a Senior Economist with the financial firm UBS, stated, “A full-scale default is avoided, for now. A full-scale default with a proper haircut (cut in the principal amount) is still, in our view, inevitable.”
Despite the fall of silver from it’s near-$50 high earlier this year, silver has experienced a nice recovery with a gain 26% on the year, whereas gold has risen only 12%.
At 4:00 pm (CT) the APMEX precious metals spot prices were:
- Gold – $1,602.70 – Up $14.70.
- Silver – $40.17 – Up $1.16.
- Platinum – $1,799.00 – Up $11.20.
- Palladium – $807.90 – Down $3.10.
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