U.S. debt magnitude continues to draw concern

The size of the U.S. national debt are raising concern about the long-stability of the dollar while also giving people more of a reason to talk to silver and gold dealers about precious metal investment opportunities.

In fact, one South Carolina state lawmaker has even made news with his proposal to end the use of federal dollars in the state and replace the money with silver and gold coins.

The lawmaker, State Representative Mike Pitts, a Republican, recently spoke to Neil Cavuto on Fox News about the idea. A transcript of the interview notes that Pitts has received a "mixed" reaction to his proposal, which he explained would amount to "taking the state to the gold-silver standard and backing up what would be our dollar."

Pitts also told Cavuto that gold "is more valuable than that paper dollar you're trying to spend" and suggested that his bill had largely been intended to ignite a debate and a dialogue over the issue of government spending and the handling of debt and currency issues.

The issue of the national debt has gained more prominence after two consecutive years of deficits exceeding $1 trillion, with more on the horizon as the national debt rises to levels once thought unthinkable. Further fueling the attention to fiscal responsibility is the state of the economy and news headlines from countries like Greece about the economic uncertainty their own sovereign debt problems are contributing to.

In fact, things may be even worse in the United States than some had previously thought. An Associated Press report cited government data noting that for February, the deficit had been $220.9 billion, which was 14 percent higher than the record for that month set last year.

For the first five months of the current budget year, the AP added that the deficit stood at $651.6 billion, which was said to be 10.5 percent higher than at this time last year. In a somewhat positive sign, the wire service also noted that government revenues had posted a year-over-year improvement in the monthly report for the first time since April 2008.

Since the debt is reaching a point where it costs hundreds of billions of dollars a year just to pay the interest on it, economists and others are becoming increasingly alarmed about the long-term prospects for the world economy. However, it remains to be seen if the political will exists in Washington before solid action is taken on the matter.

Portugal follows Greece in lowering spending - Superior Gold Group

Portugal's government is reportedly following in the footsteps of Greece by adopting austerity measures to help hold off looming budget problems.

For several weeks now, the fiscal situation in Greece has alarmed investors who are concerned about the long-term damage a debt default could inflict on the euro. Greece has taken some steps to control its spending, casing angry demonstrations by some of the country's public employees.

More recently, an Associated Press report notes that Portugal is trying to raise about $1 billion from a bond issue this week and is hoping to cut its own deficit by reducing welfare benefits and other costs while also using strategies such as privatization of some services.

These are hardly the only countries that have alarmed investors in recent weeks. Spain is also among the European nations thought to be facing serious debt woes, while some investors have become increasingly wary of the debt situation in the United States on the heels of a deficit that has exceeded $1 trillion for two consecutive years.

Given the difficulties that a major nation's debt default could cause for world financial markets, it may make sense to speak with a silver and gold dealer about some of the stable investment opportunities that may be available.

Superior Gold Group - Scottish gold mine thought to have high potential

Demand for dealer gold is remaining strong in light of worldwide economic uncertainty, and so far, producers are doing a good job keeping up with investor interest in precious metals.

For example, a substantial amount of news has been generated from active and lucrative gold mines in parts of the world that include Latin America, the American West, Canada and Alaska. To a lesser extent, there have also been facilities in Southeast Asia and other nearby regions that are showing considerable economic potential.

However, commercially viable gold mining operations are cropping up in some potentially unexpected parts of the world.

For example, Scotgold Resources Limited recently announced that that it has submitted a planning application for the Cononish project, which would become the first gold and silver mine in Scotland. This action was said to have been undertaken after three years of government and community consultations.

A separate announcement from the company recently indicated that the total inventory for the Cononish project is now thought to consist of 163,000 ounces of gold and 596,000 ounces of silver. The company has also identified some spots in Ireland that are thought to have significant gold mining potential.

Gold momentum enjoys a strong week

Commodities, including gold, had a good week in part because of growing economic optimism in various countries around the world.

A report by Bloomberg cited positive economic signals in Australia and China as fueling gains in industrial metals including copper, while concerns about sovereign debt problems in Europe were further fueling the momentum for investing in gold coins and similar options.

"Gold is moving along with all of the commodities. There's some economic optimism that's bringing in buying. People want to embrace gold with the overall risk tolerance that is coming back into the market today," Adam Klopfenstein of Lind-Waldock told the financial news provider.

Gold prices had previously staged a small retreat, which gave more investors the potential to add to their positions or to get into the market at a lower price.

Looking ahead, demand for gold and silver is likely to remain strong in the coming months due to a mix of concern for the economy in some quarters, as well as the increasing demand for precious metals in developing nations, which have been especially seeing renewed financial activity so far.

Economic consequences of Greek debt could be wide-ranging

While the European Union continues to weigh its response to a fiscal crisis in Greece that has brought further attention to the global problem of excessive sovereign debt, some are warning that the United States may be set to face its own similar situation in the not-too-far future.

Writing in an op-ed piece in London's Financial Times newspaper, Neil Ferguson warns that it "would be a grave mistake" to believe that current debt woes rocking Greece, Portugal and Spain will not end up spreading to stronger European economies.

He adds that the current situation is "a fiscal crisis of the western world" and that "its ramifications are far more profound than most investors currently appreciate." Worse for the EU, there are few options for dealing with Greek debt that can be considered desirable from a financial standpoint.

While much of the world' attention has been focused on Europe in recent days, the United States has been drawing concern over its own skyrocketing debt, with a budget deficit exceeding $1 trillion for the second consecutive year and a national debt that will exceed $14 trillion.

If and when such debt burdens become unsustainable, those who have sought out gold and silver investments will be well-positioned to ride out the ensuing fiscal turmoil.