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Stock Ideas Investors Daily Edge The American meltdown is not the end result of capitalism
Stock Ideas Investors Daily Edge The American meltdown is not the end result of capitalism 
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The "New" Exxon Mobile is up 83%... and counting! T. Boone Pickens is a major oil guy. He became successful buying up oil and gas companies and trading energy for his fund, BP Capital. And now he’s forecasting $150 oil. Not only is he forecasting higher and higher prices for black gold, but he’s also putting money into new oil companies. |
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| The American meltdown is not the end result of capitalism |
| Friday, 30 January 2009 | ||||||||
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Would you choose to encumber your own family and future generations to personally pay for the “stimulus” boondoggle? You would necessarily fund continued government waste, fraudulent accounting, pork spending, crony bailouts and other central planning adventures. Pretty much indefinitely. What you've seen lately is what you will continue to get with this funny money crowd. The game has not changed. Most people wouldn't volunteer to cough up decades of commitment to this project. That's why it's not done on a volunteer basis. If you're locked in the fiat dollar sphere you will pay and you will pay dearly. Tennesseans aren't the only ones from the “volunteer state”. The feds don't have this money just lying around waiting to be put to good use. They have saved zippo. In fact they've been deeply in the hole for an entire generation and get hopelessly more so all the time. There is lots of enthusiasm about President Obama taking the reins. It's hard not to get excited about seeing the doors closed to the last eight years. Make that sixteen to twenty years and counting. Unfortunately, our current economic and financial problems aren't going away just because an impressive ceremony was recently held in DC. It's much bigger than that. Obama is a politician not a magician. Those that believe 2008 was a horrible year, but there will be smooth sailing from now on are a special breed: Ostrichus Americanus (GMO) Truth be told… normal ostriches don't really stick their heads in the sand. This American genetically modified version definitely does however. I'm told other orifices are also commonly utilized. Ouch! The American meltdown is not the end result of capitalism. These ongoing catastrophes are not free market and honest money failures. We haven't had those essential foundations for longer than I care to express. You're viewing central planning and “command economies” coming apart as they always have. Ask the Soviets if economic foundations are important.
Credit derived bubbles are failed conceptions. An economy that depends on consumers borrowing their way to wealth is no stable economy. The main reason that the banks have received transfusions first and foremost is because they are the primary administrators of this absurd credit demand economy. Bubbles-R-Us franchises must be salvaged, "Oh, Say, Can You Still See? Part 14: Summing Up an Historic Disaster". They are the instruments of power as well as the recipients of government largess. The major banks remain on the ropes at home as well as abroad. Nationalization is a distinct possibility. President Obama casually mentioned in his inauguration address that we should get used to trillion dollar deficits. That means the government is going to have to borrow one to two trillion each year to keep the ship afloat. Here are the marks for this daunting task: 1. Bankrupt, financially strapped and fearful US citizens 2. Bankrupt, financially strapped and fearful foreigners 3. Foreign central banks with economic problems in their own nations 4. The Fed Please remember the Fed is the lender of last resort to US central planners. They will buy (monetize) all Treasury needs if necessary. It is now necessary. Every present dollar holder pays the bill through loss of purchasing power or future taxes when the Fed monetizes. Future generations are encumbered. We are past the point these amounts can ever be repaid and the key word default enters the conversation. Get used to it. Those cheering these ongoing desperate printing and spending extravaganzas have their heads in the sand. Here's a quick peek at Financial Ground Zero: Yep, the long (30-year) Treasury is the fulcrum across which the US must operate. Bond prices go higher as interest rates fall. The party has a chance of continuing if the world continues to buy in to our habits- borrow, spend and consume. Otherwise… it's game over. Watch the Treasuries. When interest rates are forced significantly higher to entice buyers the Treasury market will tank. The chart clearly shows an unsustainable parabolic spike in recent weeks and months in a flight to supposed “safety”. The Treasury market was hit harder last week than it's been hit since 1987. Bill Buckler, of the highly regarded Privateer, reports that there is not sufficient global savings to buy more than 30 percent of the proposed extreme spending programs. Hello! The Treasury market is vastly larger than the stock market and is way too big for effective Federal Reserve control. Not that they won't try. Yes, the Buck is also in the crosshairs. The Treasury and dollar twin towers are coming down from home grown greed, lust for power and sheer arrogance. Very few understand that it is central planning that has also done in the United States and most of the rest of the world. Stay tuned, this global freak show is just getting started. How can you protect yourself from what is coming? Understanding the problem is the first step. Improving Ostrichus Americanus' ability to see would be most helpful. Assist your friends and family members with an extraction maneuver … a major dent could be put in the unemployment figures with this assigned task. It's not yet too late to pick up some real money in the form of precious metals. My Resource Windfall Speculator has a broad based commodity portfolio with a present emphasis on gold stocks which stand to perform spectacularly well as monetary events continue to play out. There are also strategies to maintain wealth through Treasury and Dollar shorts. I'm very impressed with the quality of experts assembled in the editorial columns of IDE. There are very unique and diverse talents represented therein. We have income experts, bond experts, general market pros, ETF gurus and international specialists. Jon Herring gave me the initial play on shorting Treasuries through his 21st Century Prosperity Report. His article on the gold market fundamentals last week, "Peak Oil... What about Peak Gold?", was spot on. Watch the Treasuries for key signs of systemic implosion. Make sure you're not standing on financial ground zero. Invest Resourcefully, Rusty
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