GOLD CENTURY

[SAMIA]

Nouriel Roubini - Massive Global Defaults

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/4/30_Nouriel_Roubini_-_Massive_Global_Defaults.html



Eric King: The comments from Nouriel Roubini at the Milken Global Conference are stunningly bullish for gold and silver, “If governments become effectively insolvent they default on their debts and that’s what may be happening soon in Greece and in the rest of the Eurozone and eventually what may happen soon in other advanced economies.”


To understand how extraordinarily bullish this is for investors in gold and silver take a look as Roubini goes on to elaborate on the shocking reality of the US debt situation, “Think about the US government where first of all our federal deficit and debt is going to go to 100% of GDP based on official statistics. Then we have another 20 to 30 trillion dollars of unfunded liabilities coming from social security and medicare...Then we have the disaster of state and local governments, their official stock of debts according to the Moody’s Bond Market is about 2.8 trillion dollars that’s another 20% of GDP. Then you have between 1 trillion to 3 trillion of unfunded liability of the state and local government pension funds, that’s another 15 to 20% of GDP. So while the official public debt already looks like a disaster because it is going from 50 to 100% of GDP, if you add all of these unfunded liabilities...that debt is even higher than that...Governments are very short-term and unless the markets then force them to adjust like they are right now in the Eurozone, the incentive is always to kick the can down the road and postpone the problem, socialize the private losses rather than addressing this fundamental problem. That’s why I’m worried.”


Nouriel may be worried and for good reason but his message could not be any better for those betting on higher gold prices. Rob Arnott who has won 5 Graham & Dodd Awards shocked King World News listeners by quantifying all unfunded liabilities and total US debt at 850% of GDP. Rob then went on to say that the US is in worse shape than Japan. These types of fundamentals are the underpinnings of phase II of this secular bull market in gold and they assure a manic phase at some point down the road.