One has to be impressed and slightly scared as the global powers one by one fall. Wars, famine, disease...these countries have been through it all but the one thing that cannot be fought is financial crisis. A simple lowering of a rating on a countries credit and panic sets in, borrowing costs soar for that country and they can literally be brought to their knees. Who said the atomic or hydrogen bomb was the biggest destructive force on earth? I say it is money and credit in today’s day and age. Bottom line is this; the dollar continues to rule the roost when it comes to safety. As much money as the US is printing and trust me, it is trillions and trillions, the United States for now is still the safest place to house the worlds money. That is exactly why the dollar seems to rally every time we see a little big of financial crisis hitting the global markets and countries. It was originally Iceland then Dubai, Greece and now Spain. Who is next? When will it be the US's turn?
The other thing I wanted to discuss today was this 200 billion in Tarp funds the government was getting back from financial institutions. The government is championing that this is amazing but why? The fact that we are getting some of our tax money back is a great thing? I thought we were supposed to! I am somewhat being sarcastic here because the government continues to be a joke when it comes to pulling the wool over the eyes of the common US citizen. They are making it out to seem like this is a bonus yet in fact the tax payer will lose money as AIG, GM, Chrysler...etc will never be able to repay the money they borrowed. In addition, Freddie and Fannie...just a total mess. And please, let's not get into the balance sheet of the Federal Reserve and the junk they are taking on! What is even scarier is that the government now feels like they have a surplus of money and you know the government, the policy is, NOT ONE DOLLAR SHALL BE SAVED. They want to spend this money immediately to "stimulate jobs". Oh, by the way, great job on that with the last stimulus package my dear government! If I heard correctly, it costs over 100k just to create a job paying 50k. Well that math makes sense! Note the sarcasm again folks. In any case, that is our money folks and you should be outraged it was used in the beginning to bail out the wealthy banks after they screwed up an even more outraged it is not going back into your pockets by paying down the deficit.
For now I leave you with one final thought. Listen, learn and truly keep the government and Wall Street hype away from your ears and eyes. Always do your due diligence and never trust what is just plainly said to you. I will continue to bring you my views in future posts.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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