Surging Long-Term Debt Yields Are Latest Problem For Over-Indebted Governments

Gold and silver prices were down today. Although they’ve recovered from their lows to leave the gold futures at $3,292, and silver at $33.16.

However, in terms of variables that will have a heavy influence on the gold and silver prices going forward, there's also been a global surge in long-term yields over the past month.

The 30-year bond in the US has reached its highest level since May of 2007.

Which obviously isn't the best company to be associated with, given what happened by the end of 2007. Let alone the carnage that was to come a year later, punctuated by the collapse of Lehman Brothers in September of 2008.

It also means that heavily indebted governments are now going to face a higher cost of borrowing, which means that all else equal, their deficits are going to increase. Which ultimately gets funded either with austerity or more printing. With the latter being the centuries-old heavy favorite.

The situation in Japan is particularly concerning.