This from Seeking Alpha...
44 states are facing budget shortfalls. California is leading the way as it is expected to spend 50% more than it will generate this year. Now that is a really scary thought. Since 2007 US states have collectively spent 300 billion more than they have generated. These deficits mean higher taxes and so far 33 states have raised taxes, but collections have plummeted to their worst levels in 46 years; you cannot squeeze water out of a rock. No jobs means no revenues but states are selling new bonds at record rates to raise funds. It's a recipe for long term disaster.

As you know, I have tried to distance myself as far as possible from the financial services industry. When these bonds ultimately default, all those mutual fund and insurance companies that have bought them will find themselves in a very tight spot. WHEN, not "if," this happens, investors will look to preserve their wealth in things that are not someone else's liability. This is when gold will shine. Between now and then.... buy as much as you can, as often as you can.