Something else that went quietly under the market’s radar was the news that the US government (yes, that ‘gubmint’) posted its first monthly budget…surplus (!) since late 2008 this April. Uncle Sam was in the black to the tune of $59 billion last month, go figure. That’s one for Ripley’s “what are the odds of that?” kind of questions, but it is a fact. It is the first such surfeit for the Obama administration and it is likely to not “go over” very well in the Romney election camp, or on Fox News for that matter, even if it is not (yet) a game-changer overall.
Of course the only month the U.S. government is going to be in a budget surplus at this point will be April, when a few citizens still manage to hand over a large portion of their hard-fought earnings to Uncle Sam. Actually, it isn’t usually working stiffs who owe tax to the IRS on tax day (most “W-2 wage earners” get refunds on their payroll contributions) but rather investors and the self-employed. Given how bad the economy has been for small business and the market for investors in 2011, it is actually surprising that April 2012 did generate a surplus. In any case, Jon Nadler is being at least a bit disingenuous with the idea that a one-month budget surplus could be gold bearish given that the current year’s deficit will still be well over $1 trillion (and this will continue for as far as the eye can see). Then there is the silly point about unemployment actually not being that bad and other assorted subjective statements that Nadler is cherry picking in support of the negative gold sentiment in the market. It all comes off about as desperate as the most desperate of gold bugs on the opposite extreme.