With the US federal deficit running at 17% of gross domestic product (GDP), gold has become an indispensable portfolio hedge against a severe deterioration in US government finances.

Gold jumped from US$800 to $1,000 an ounce after the 2008 world financial crisis as the US deficit briefly touched 10% of GDP. With the US economy still dependent on multi-trillion dollar demand infusions, gold broke out to a new record.

The favorite in next month's US presidential election, Joe Biden, looks at the federal budget the way a birthday boy looks at a piñata.