All eyes were focused this week on the European debt crisis and the U.S. debt ceiling discussions. While there was serious progress made on one of these issues, it’s certainly debatable whether any real progress was made on the other.
Following a day-long meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Wednesday, the European Union leaders approved a bailout plan for Greece. Details of the European Union’s bailout of Greece have emerged, and the package is being seen as stronger than expected. Fitch Ratings said it will declare Greece to be in “restricted default,” however this was an expected consequence, according to EU leaders. The deal is expected to stave off any contagion to other countries in the euro zone.
In the U.S., every time progress appeared to be made, it stopped dead in its tracks. A major deficit plan was agreed upon by the bipartisan “Gang of Six” in the Senate. This deal would reduce federal deficits and is seen as a major step forward in debt ceiling negotiations. President Obama had publicly backed the plan, but he has since backed off. House Republicans voted this week in favor of a campaign to reinforce their budget views and eliminate the need for compromise. The slogan for this campaign is “Cut, Cap and Balance.” A bill the Republicans are promoting this week would condition any increase in the debt limit on immediate spending cuts, set caps on future outlays and require a congressional passage of a balanced-budget amendment to the Constitution. Obama has specifically said that he will veto this bill if it passes the Senate.
President Obama is now said to be working on a major deficit-reduction package that includes $3 trillion in cuts while not including immediate revenue increases. This is a sticking point to Democrats, who are said to be upset with the plan. Obama would have to convince his fellow Democrats that this is the right deal, and he will need to do it quickly; the U.S. is now a mere 11 days away from defaulting on its debts.
Credit rating agencies were in the headlines frequently this week. On top of the situation in Greece, the agencies came out in force to warn of the consequences of a U.S. default. Standard & Poor’s reiterated its position Thursday that if the U.S. government misses its scheduled debt payments, it could cut the U.S. credit rating as early as August. There is some tie-in to both raising the debt ceiling and balancing the budget that S&P needs to see to avoid that type of action. The trickle-down effect could be catastrophic to a number of companies, including Fannie Mae and Freddie Mac, plus the sovereign debt rating and the insurance industry. Senator McConnell’s “back-up plan” that had been discussed as a fall-back option has just been discredited by Moody’s as not doing enough to balance the budget and would still put the U.S. on a path for a negative credit outlook.
Gold hit a record high Monday, and has spent most of the week around the $1,600 mark. Silver hit over $40 for the first time since May, and remains in that range.
Weekly Precious Metal Spot Prices
Spot Gold prices opened this week at $1,591.10. The all-time record high was on Tuesday, July, 19th at $1,610.70, while the low for the week occurred on Wednesday, July 20th at $1,581.10. Gold ended the week up $9.50 at $1,600.60. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.
Spot Silver prices opened this week at $39.04. Silver reached a high of $40.88 on Tuesday, July 19th, while this week’s low for Silver occurred on Wednesday, July 20th at $38.22. Silver ended the week up $1.12 at $40.16. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.
Spot Platinum prices opened this week at $1,758.00 and ended the week up $41.00 at $1,799.00. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.
Spot Palladium prices opened this week at $783.80 and ended the week up $24.10 at $807.90. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week at APMEX.com.
America the Beautiful 2-Coin Set
This two-coin 2011 America the Beautiful set contains the five ounce Gettysburg National Military Park coin and the five ounce Glacier National Park coin.
The America the Beautiful Silver bullion program marks a significant change for the U.S. Mint’s coin offerings with the introduction of the larger format of five Troy ounces of Silver bullion. The entire 56-coin collection will display the beauty and diversity of America’s National Parks and sites. The coins will be issued over the course of 12 years. Designs and inscriptions are duplicates of the currently circulating commemorative quarters.
The Gettysburg National Military Park coin shows the Soldiers National Monument, which stands in the center of the Soldiers National Cemetery. This monument was constructed to honor the soldiers who fell at the Battle of Gettysburg in July of 1863. The statue now stands guard over the 6,000 American soldiers laid to rest at Gettysburg.
The Glacier National Park coin depicts the majestic glacier-carved Mount Reynolds. The mountain goat in the foreground reminds us of the diverse wildlife fostered within Glacier National Park. Glacier National Park obtained federal protected status on Feb. 22, 1897 and consists of 1,000,000 acres.