Japan may be an economic model for the United States. This may not be the best news for U.S. consumers and investors but it seems like Japan has already made great progress towards record-setting budget deficits and levels of debt. Japan’s government spending deficit could be more than 10 percent of its gross domestic product (GDP) this year and its sovereign debt is about 290 percent of its GDP. The U.S. figures are significantly lower, for now.

First let’s get the sad news out of the way; this will be my last column for a while. It’s been a lot of fun and I’ve enjoyed hearing from many of you over the last two years; it’s been a great run. There’s no particular problem or disagreement prompting this exit, it’s just the way things go sometimes. Now back to business.

Gold was down in early trading, largely on profit-taking, but a late morning surge pushed prices higher by $0.18, then down again by $1.39 to $1,672.50. Silver was down $0.10 to $30.72 for a silver/gold ratio of 54.4. Prices are all over the chart this morning, sometimes switching between positive and negative territory every time the board updates.

Gold is a difficult market to analyze. The fundamental factors are provided by the economy in addition to the laws of supply and demand. But at times, fundamentals are ignored and nothing besides emotions drive market prices. That might describe why gold is not trading at all-time highs right now.

Based on the fundamentals, gold is bullish. Central banks around the world have responded to slow economic growth by increasing the supply of money. With more money chasing the same amount of goods, inflation is to be expected although the start can be delayed for some time. The supply of gold is also growing slowly and increased money around the world is pushing the price of gold, oil and other commodities higher. In addition to the bubble building in financial markets based on the money supply, gold is becoming scarcer. As demand booms from increased populations, supply might not able to keep up.

Commodities were higher Thursday on expectations of increasing demand from China as the global economy lurches to an uneven recovery.

Gold was up $7.77 in early trading to $1,663.87 and silver was up $0.19 to $30.51 for a silver/gold ratio of 54.5. Industrial commodities are higher almost across the board with crude oil, platinum, palladium and copper all outpacing gains by overseas currencies against the dollar.

IOnce gold fell out of the media spotlight, it immediately reversed a long price slide and started gaining ground for the week. The rise for silver has been more steady and sustained because silver is not only a precious metal it’s also an industrial metal with ever expanding uses in the medical and pharmaceutical industries. It would be no surprise then that when gold is showing price weakness that the silver/gold ratio would tend to increase over time.

Some economists are always negative and others are always upbeat. This bias is usually noted in news reports about their forecasts. For investors, their track record is more important than their bias. In the past few years, economists associated with doom and gloom forecasts have often been more accurate because the state of the economy has been gloomy and no amount of optimism can change the facts.

One of the most noted members of the economic bear community is Marc Faber who is also called “Dr. Doom.” Faber is the publisher of an advisory service named The Gloom Boom & Doom Report and recently told CNBC that because he believes that governments around the world will print money to meet their debt obligations, “I want to have gold as an insurance policy.”

Gold and silver will be out of the spotlight for a few days as Alcoa kicks off earnings season and AIG stole the headlines by threatening to sue the taxpayers who bailed them out.

Gold was up $1.99 to $1,663.19 and silver was down $0.06 to $30.38 for a silver/gold ratio of 54.7. If gold and silver prices hadn’t gone different ways this morning, the silver/gold ratio could have easily breached 55 today; that’s more good news for silver stackers.  Crude oil joined silver lower while platinum, palladium and copper were all higher in early trading.

Talk of deficit reduction is masking the reality of the growth of government spending. In 2012, government bureaucrats at the federal, state and local level spent $6.2 trillion. In 2013, that spending is expected to grow by $100 billion this year.

Government spending has exploded in the past four years. Prior to the World War I, government spending varied from 6 to 9.5 percent of the economy. After the war, spending never fell back to pre-war levels.

Even at the height of the Great Depression, when government programs were building roads and infrastructure to combat unemployment, spending averaged about 20 percent of GDP. The current level of spending is obviously unprecedented in peacetime.

Gold futures stabilized along with the dollar in choppy early trading on Tuesday.

In early trading gold was up $5.96 to $1,655.76 and silver was up $0.10 to $30.33 for a silver/gold ratio of 54.6.

Commodities in general were higher in early trading with platinum, palladium, crude oil and copper all posting gains.

The U.S. government faces about $16 trillion in debt now and that figures keeps growing. That is a problem but so is Japan’s $13 trillion in government debt. In fact, Japan’s debt may be more of a problem.

Debt must ultimately be repaid or the lender takes a loss. That is why banks consider a potential borrower’s capacity for repayment when considering a mortgage. An application for a loan will only be approved, if credit underwriting standards are being followed, if the borrower has enough income to make the payments and the collateral is worth more than the amount of the loan.

Even at the height of the real estate bubble, lenders limited loans to about 125 percent of the property value. Unsurprisingly, many of those loans defaulted. An application for a loan valued at more than 200 percent of a home’s value would have been turned down.

Gold briefly held in positive territory Monday morning before succumbing to a strengthening dollar and joining most commodities trading lower.

Gold was down $9.18 to $1,647.56 and silver was off $0.12 to $30.05, leaving the silver/gold ratio at 54.8.

It was a sea of red ink for industrial commodities across the board with gold and silver being joined lower by crude oil, platinum, palladium and copper. The bright spot for precious metals investors was that the drop in gold prices was lower on a percentage basis, lending further credence to my assertion that gold was oversold on Fed comments last week. Today’s drop is almost exactly in line with changes in the exchange rate for the dollar.