gold has topped

deflation is coming, within 3 months it will seem like the sky is falling, deflation is spreading around the globe, Australian house prices will plummet, world financial s will plummet and so will gold with the rest of them

debt is rising and assets are falling everywhere in the world, leverage (the debt to asset ratio) is increasing

Australian unemployment will sky rocket and with so will be exposed how over blown the Australian property market is and how leveraged household balance sheets are, ANZ are walking the green mile :)

http://www.nakedcapitalism.com/2009/06/guest-post-what-de-leveraging.html

its simple, debt is rising, asset prices are falling, leverage is increasing, add future commitments eg Alt A , MUNI ,Commercial and Medicaid and Medicare

Pick any sector you want , incomes are falling debt is rising, gold is like any other asset class in a deflationary shock

Take MUNI's like California exactly the same model works for ever sector

Arnie like everyone else wanted to live beyond his means he didnt want to raise revenue (unpopular) he simply borrowed like everyone else

http://www.laprogressive.com/2009/05/19/schwarzenegger-driving-california-bankrupt/

If he had a budge shortfall he would issue bonds, if there was an unpopular tax he would remove it and borrow instead

Meanwhile.....................

Folks who live in Cali were borrowing to buy more expensive homes, this made Arnies situation even worse, here he was not want to raise revenue or cut spending, he doubled up by spending the tax windfall of the credit bubble

http://news.yahoo.com/s/nm/20090611/ts_nm/us_economy_california_revenues

This is classic debt deflation MUNI style

California's revenue is falling, and the demand on that income to service debt it increasing

Meanwhile...................

Californian folks face a massive increase in the mortgage debt servicing via Alt A take one county in California Sonoma

http://en.wikipedia.org/wiki/Sonoma_County,_California

In Sonoma 18% of all mortgages are yet to fall due ALT A!!!!!!

In California, there are currently floating around 186,917 Alt-A mortgages with a second lien on them. You can rest assured that 90 to 99 percent of these loans will implode in the upcoming months. This is where your piggy back loans and 80-10-10 crap came about. I remember when zero down was a crazy way to suck in unknowing investors to thousand dollar seminars but it actually became a mainstream way to buy a home.

http://www.doctorhousingbubble.com/financing-the-flipping-dream-alt-a-mortgages-and-california-mortgage-equity-giants-number-one-alt-a-owner-occupied-state-is-california-say-what-alt-a-and-pay-option-arms-fueled-out-of-state-bu/

Imagine what happens to Arnies budget once this happens? These are the dynamics that are occuring everywhere.

This is happening everywhere

Incomes falling debt rising Ireland is going bust

http://www.bloomberg.com/apps/news?pid=20601068&sid=aalKs.cGGLsQ&refer=economy

Ireland is facing the same problem as California

http://www.bloomberg.com/apps/news?sid=aBxWJ.qKLWsM&pid=20601087

Or how about the UK where Gordon Brown needs to find $400B by issi9ng bonds to just cover the bank bailouts

http://www.guardian.co.uk/business/2009/jun/07/robert-stheeman-treasury-interview

How about Greece, Ireland, Italy, Portugal and Spain? All the same.

How about Russia ?

http://en.rian.ru/russia/20090606/155185131.html

Russia's income fell due to the oil price dropping, California fell due to housing revenues falling, different symptoms of the same disease, folks need USD to retire debt, in a debt based economy where most debts are denominated in USD then USD are in demand to retire debt

All of these feeds into the Australian economy, falling prices in nearly every sector will smash Australian businesses at every level, falling incomes and rising debts will see Australia go the way of everyone else

Gold is over bought sentiment has run to far to the positive

http://www.elliottwave.com/freeupdates/archives/2009/06/08/Bob-Prechter-On-Silver--Gold.aspx

Gold is a USD hedge and anyone predicting a week USD are not looking at the laternatives, sure USD is weak but OMG look at everything else