Doug Hornig, senior prognosticator at The Casey Report, analyzes the alarming trend of U.S. federal debt and its future implications.

“I have always depended on the kindness of strangers,” said Blanche DuBois, in the final words of the play A Streetcar Named Desire. Well, don’t we all.

Many citizens probably still cling to the old saw that public debt doesn’t matter because “we owe it to ourselves.” Wrong. Debt always matters. And as for whom we owe it to, it is a lot of kind (or, at least, not yet unkind) strangers.

Gold gained yet another powerful ally yesterday — hedge fund icon Paul Tudor Jones. The man who famously called Black Monday in 1987 and the Nikkei crash a few years later now thinks “gold appears to be cheap.” In a note to his investors, Tudor said, “I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time… gold’s value should increase as its scarcity relative to printed currencies increases.”

With the markets pulling back, the opportunities for small-cap stocks are opening up again. We felt it was time for another look at small caps and one of the masters of contrarian investing, David Dreman. Having a contrarian view of the markets can be wildly profitable.

Currencies rally…  Eurozone growth unexpectedly stronger!  FOMC extends QE…  Norges is the first!
And Now… Today’s Pfennig!

Currencies adrift all day yesterday…  Data prints begin today with Productivity…  Stop to think!  Chinese data is impressive… And Now… Today’s Pfennig!

Bond bubble remerges… details behind the gov’s latest debt struggle… The slow demise of snail mail… USPS forecasts record losses… Customized drugs: Patrick Cox on a breakthrough set to revolutionize health care… Bill Jenkins with another sign the euro is overvalued… his price targets below…

At Casey Research, they have been watching the actions of foreign holders of U.S. dollars as closely as a Las Vegas pit boss watches a card player on a $1 million winning streak. Many of those in the deflation camp largely, or entirely, ignore the potential role these foreign holders may play in the drama now unfolding.

China has once again snatched the leadoff spot in our daily lineup. And once again, they’ve knocked the cover off the ball. The Chinese economy expanded at a dizzying 7.9%, their government announced yesterday. That far exceeds analyst expectations and China’s still-impressive 6.1% first-quarter growth.

With the global economy on the mend, could gold be gearing up for another record-setting run? It sure looks that way. 

Jobs data skewed by ’seasonal adjustments’…  BOE surprises the market…  Oil falls below $60…  China’s reserves continue to grow… And Now… Today’s Pfennig!