What's another $825 billion?

As we near the inauguration at the end of this month, a wave of change is certainly coming to the United States of America. Unprecedented levels of debt is one thing, but it seems like they are at least taking the bulls by the horn. 

All this bodes quite well for gold, regardless of what the short term market may think.

Reflecting back on the last little while, the Commodity Exchange disparity still exists - no default happened on the fateful December 29, 2008 as so many experts have called it. 

CNBC discusses this back in October. This is another lesson in taking external opinions with a grain of salt. While the price disparity still exists - it occurs with another commodity that most people buy far more often - oil. 

At the local gas station in Canada we are seeing $0.85+ a liter, all the while crude is trading at a historic low of $35/barrel (or about $0.35/liter)...anything glaringly obvious here? If you thought the local gold shop running out of bullion and selling an ounce for $850 or about $50 above the trading price - it's less than 10% premium. Not quite so bad now is it?

Crude prices fall below $35 for the first time this year on weak economic data

NEW YORK (AP) -- Oil prices tumbled below $35 a barrel Thursday as new employment claims rose and government reports show that unused gas and oil inventories continue to build.

Light, sweet crude for February delivery fell $2.35 to $34.93 a barrel Thursday on the New York Mercantile Exchange. At one point prices fell to $34.65.

Prices have fallen 27 percent in just a week and may hit new five year lows, analysts said.

"It was very predictable that January was going to be ugly, but I'm not sure if anyone thought it would be this ugly," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Kloza said trucking companies have seen an huge drop in business as orders dry up, just one example of how demand for energy has fallen away.

OPEC lowered its energy demand forecast for 2009, with investors already shrugging off production cuts of 4.2 million barrels a day by member countries. The Organization of Petroleum Exporting Countries said in its January report that it expects world demand for crude will fall 180,000 barrels per day in 2009, compared with the previous year.

In other news, Democrats unveiled the next round of stimulus package - to be honest it seems more tailored to the public so let's hope that will bring some confidence back into the equity markets - I see tax rate cuts, individual benefits, and no mysterious bailout for toy arrow companies... I'll keep my fingers crossed.

WASHINGTON (AP) -- House Democrats are circulating an $825 billion economic stimulus measure that emphasizes health care, education and highway construction as well as tax cuts for individuals and businesses.

A summary of the measure shows spending totaling roughly $550 billion and tax cuts of $275 billion, although the totals are expected to shift considerably as Congress works on the bill.

Democratic leaders plan to unveil the legislation later today. The Associated Press obtained a copy in advance.

Democratic leaders have pledged to have a bill ready for President-elect Barack Obama to sign by mid-February.