What Is The Biggest Force In The Market These Days? Government Of Course
WIth the markets reacting violently to policy of the lack of policy each day out of Washington, you have to wonder do things like earnings even matter anymore? Maybe the government should just tell us what a share of Apple should trade for?
With the Obama/Pelosi/Reid rule of America, we are moving further and further away from markets and closer to socialism and bigger government. Why do I care and why do I even bring this up? Because, well, I work hard because I want to make money and provide for my family a nice life. That reward for my hard work is much at risk right now and if you have watched the people at the two Obama rallies in Indiana and Ft. Myers, Florida over the past few days, you will see who wants to take these rewards from me (and you). Look, I know lots of you are Obama fans, but realize this is bigger than Obama. It even started with Bush. But, when do we face the facts and take a stand for freedom and opportunity and risk?
Here are some good articles to read. Don’t be kept in the dark. Know what is really happening out there, because your voice still counts (for now).
More Shady Government Action
So much for a new era of transparency. Pelosi and her colleagues are doing deals behind closed doors and rejecting opponents call for television cameras to be a part of the stimulus negotiations. Read about it here.
A Good Look At The Stimulus Bill
Here is a good non-partisan look at the economic stimulus package being signed into law…
In a sign that may reveal much about the current deal-making environment in Washington, House speaker Nancy Pelosi has outmaneuvered the Obama Administration in the design of the massive $827 billion so-called Economic Stimulus Package. With the collusion of three moderate Republican Senators – Collins, Snowe and Specter – Pelosi may succeed in steering President Obama into supporting a package with which he may secretly disagree.
Despite the Presidential rhetoric of change, the Pelosi plan is Washington at its most habitual. Her version is a massive, pork-laden monster. Tilted heavily towards consumption, only 10 percent of the bill is allocated toward the infrastructure spending that the President talked about so frequently during the campaign. President Obama initially favored a middle-way. It was to be based on massive public spending, but specifically on infrastructure.
Far from restoring the economy to health, the ‘pork-barrel’ Pelosi plan will likely force the U.S. economy into the catastrophe of acute stagflation and decline, with grave long-term repercussions at home and abroad.
It is clear that we are now headed into an abnormally severe recession, and we may be face-to-face with Second Great Depression. Tell-tale symptoms of Depression include competitive currency devaluations and protective trade measures. Of even greater concern is the historic fact that trade wars too often lead to hot wars. The times of peace and unprecedented prosperity that we have enjoyed for decades are now under threat.
With the stakes this high, Pelosi should have restrained her urge to flex political muscle.
Most economists agree that America has enjoyed unprecedented prosperity, based primarily on excessive U.S. dollar liquidity and unmanageable levels of debt. Thus, any healthy correction would necessarily involve serious deleveraging and a severe recession. After a lot of pain, the economy would rebuild with healthier fundamentals. Infrastructure improvement would aid, but not cause, the eventual recovery.
Recession is the natural cure for the politically inspired profligacy that America has enjoyed for almost 40 years. Unfortunately, the side effects of this medicine, namely the rapid reallocation of labor resources and deflationary damage to debtors, are still unpalatable to pandering politicians.
The Washington regime, particularly members of the Democrat persuasion, leans towards a socialist solution of avoiding recession at any cost. After all, the bills are paid by others, such as taxpayers and holders of U.S. dollars. This results in an increasing amount of other peoples’ money being spent on ‘public’ works that would in other times carry the label ‘pork barrel.’
Read the rest at EuroPac.net
Social Health Care or Economic Stimulus?
Lastly, if you haven’t heard about the Health Care policy being pushed through congress under the guise of “stimulus,” read this. I guess this is another example of transparency, right? Basically, if you don’t think we’re heading towards socialism, you’re very, very naive.
What To Do
Well, I’m confident the stimulus will not work, just like it didn’t work in Japan 20 years ago. However, there will be effects from it; only, they will be negative. Namely, inflation. By the way, did I mention gold skyrocketed through $940/oz. today? My gold stocks are up 30, 40, 50, even 60% in a matter of weeks.
They look to be great investments, that is until the government confiscates your money, your account or decides to tax anyone investing in gold in the name of national interests. God bless America… land of the free.