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What’s a budget balance?
Budget balance is the difference between what a country’s government earns from taxes and other sources, and what it spends. A budget deficit occurs when spending exceeds earnings.
When spending exceeds earnings, the government borrows money from its citizens. It also borrows money from foreign entities. If this debt accumulates, the value of its currency could decrease. The currency decreases because of fears within the international community. Other countries question the country’s ability to repay its debt.
Tracking the federal budget balance
The U.S. Treasury reports the federal budget balance monthly. The US government posted a budget surplus of $2 billion in December, booking a smaller windfall than the same month last year, as Fannie Mae and Freddie Mac payments dropped.
Including the December surplus, the US budget deficit is $177 billion for the first three months of fiscal 2015. That’s 2% more than for the first quarter of fiscal 2014.
The government spent $333 billion in December, up 44% from December 2013. Total receipts in December were $335 billion, an increase of 18%. Both individual and corporate tax receipts rose in the month.
The budget deficit’s impact on US debt
Deficits continue to accumulate. They keep adding to the US federal debt. The federal debt has exploded since 2008, but the situation is getting better. This should be positive for the US dollar. A strengthening US dollar usually leads to weaker gold prices.
This is negative for gold-backed ETFs such as the SPDR Gold Trust (GLD). The deficit is also negative for stocks such as Goldcorp (GG), Randgold Resources (GOLD), AngloGold Ashanti (AU), and Kinross Gold (KGC). It also hurts ETFs that invest in these stocks, such as the Market Vectors Gold Miners ETF (GDX).
The companies mentioned above form 24.3% of GDX’s holdings.
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : GOLD |
ISIN : US7523443098 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Randgold Res. is a gold producing company based in United kingdom. Randgold Res. holds various exploration projects in Tanzania. Its main assets in production are MORILA, LOULO and TONGON in Mali and OBUASI in Ghana, its main assets in development are KIBALI (KILO-MOTO) in Congo Dem. Rep. of, MASSAWA in Senegal and GOUNKOTO in Ghana and its main exploration property is MIYABI in Tanzania. Randgold Res. is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is 966.9 millions as of today (€ 866.1 millions). Its stock quote reached its lowest recent point on November 07, 2003 at 10.03, and its highest recent level on January 04, 2013 at 99.88. Randgold Res. has 47 442 200 shares outstanding. |