Greek American States
One aspect of the Greece situation that is being closely monitored is the confidence of the average Greek citizen of their savings at the banks.
What most people do not understand is that California is in FAR worse fiscal shape than Greece. They are estimated to have at least a $25 billion budget shortfall this year and that mushrooms in size as we move forward.
While California is the largest problem by far, states all across the country are moving closer to insolvency. In December 2009, Bloomberg estimated the state budget shortfalls at $300 to $500 billion by 2011.
We are one large country made up of small Greece like states.
What has kept these problems off the surface? Last year a significant portion of Obama's $800 billion stimulus bill ($200 billion) went to "stimulate" states. States have used this money to cover their budget deficit shortfalls, which has masked the problems thus far.
This money is estimated to run out during the fourth quarter of this year.
This is just the state level debt. The following chart shows the relation of revenue to spending for the Federal government since 1962. Last year we began on a frightening path.
Enjoy the current pull back in Gold, and keep adding to your positions. If the European Central Bank decides that printing money to bail out the sovereign debt is the best option, it takes the ultimate Gold price target to the 5 digits.