Feds to Roll Over their debt. Money Matters Airs Tomorrow. Update Aug. 11, 2010

Marc’s Notes:
The Feds gave another stay of execution to another one of its programs and said they will NOT tighten the money supply as they indicated they would a few months back. They will roll  over treasury debt and keep the toxic assets on their books. They also now set a floor under how much of this toxic stuff they will hold. Not a ceiling mind you, a floor.

This “roll over” is another in a long line of programs and bailouts they said they would halt but then renege on that promise as they see the economy slipping again. (Note- watch the movie “ROLL OVER” with Kris Kristofferson).

You have to wonder how Money Matters can call with certainty what these guys will do before they do it and how they can be so wrong so often on their calls on the economy. Just a few months back BEN BERNANKE said the economy was recovering and FED stimulus and backing would be withdrawn in the months to come. We said there was no recovery, just a juiced stock market and juiced economy bought and paid for with borrowed money and that once the money ran out (stimulus), the market would revert back to where its wants to go, DOWN.
And just like that, everything transpires as we indicated. Yet they blindly stumble forward with the same failed policies that got us here in the first place.

Nature is demanding we PURGE the debt, not amass more of it. So the FEDS try and amass more of it and then point to the “debt induced sugar high” as a recovery.
Once the sugar wears off, the FEDS look surprised the markets start falling again. I will say it again. They will never be able to withdraw bailouts or stimulus because the economy is addicted to it and without same, it reverts back to its true state, which is anemic. They will never raise interest rates voluntarily as the economy cant take any significant rate increase without going into cardiac arrest. There is simply too much debt.
Look, I’m not a naysayer, I’m just telling you what I see, and what I see is faltering economic statistics and foolish policies that have NEVER WORKED in history and wont work now.

You can’t stimulate a recovery with government spending as that money has to be TAKEN out of the economy because that is where the government gets its funds. They don’t manufacturer anything; they just get their money from US. It’s not that hard to understand. They take the money FROM US, waste 50 % of it; take their cut, then give only half of it back.
Don’t think the government gets its money from air or fields of jelly beans. It can only take it from the producers (you and I), so in essence it is removing money from the system just at the very time we NEED IT. Except when they give it back, they shotgun spray it everywhere or only give it to their favorite friends and companies, the rest is wasted. They are the biggest WASTER of money, and right now we don’t have the money to waste.

How many times are we going to believe these clowns? I am telling you right now,as I have been saying for close to 2 years now:  IT WONT BE ENOUGH. We must purge the massive debt, not garner more of it.
We do that by allowing bankrupt companies to fail, we stop bailing out bad decision makers, stop paying people to sit home, stop creating more rules and regulations so companies can accurately forecast trends so they can plan accordingly, stop manipulating interest rates by disallowing the Federal Reserve to set them. Let the market decide (that’s you and I) where, when and how much to lend out and at what rate. Stop these massive social programs and cut government by a significant amount that will curtail its expenses and spending.

But Washington has no clue. These guys are not going to stop their foolish policies until this whole thing blows up in their and our faces. Need proof? Watch for more warnings from the media on a double dip recession, bad unemployment figures, bad housing stats, and the real sign: The FEDS ramping up the Quantitative Easing program. (See this weeks UNION- My article entitled “Treasuries Anyone?). This article should go to print this week. In a nutshell, the FEDS will spray more money (gasoline) on a this raging debt fire and saddle us and our kids with even more debt.

Note how much money they will throw around as bar talk and how they say we need more “stimulus” to get a foothold. Think about that for a minute. If 5 trillion didn’t do it, what makes them think another 20 billion or 200 billion will make it turn the corner? It’s ludicrous. You could throw another 2 trillion at it and all you would have after it was spent was the economy faltering again, only saddling us with even more of the poison that caused the problem- DEBT.

For now, all holdings remain the same. Keep most money safe in bank savings accounts, with portions of your assets in gold, silver, contrary funds, dividend payers, foreign currencies, overseas annuities (see Swiss Advantage Banner on right side of website and click for information booklet- free), maintain gamblers positions in Nat Gas, Uranium, Energy and Oil.
(see past newsletters for symbols or get the Dream Portfolio).

Bonds other then US bonds will become toxic once more, so I do not hold any except in a High Paying Fund or 2. (See Super Dividend Payers List).

Other news:
Upcoming Show.
August 12th – Special Time  1:00 PM PST.
Money Matters at the Nevada County Fair Live.  Watch me do this show live at the KVMR Booth and talk with me after the show. Show title is "Beware the Ides of Fall". I will detail current market events and chronicle stock market behavior in the fall season and why you should watch out!
Stop by the KVMR BOOTH. The show is at 1.00 PM PST and ends at 2:00 pm. I will hang around to answer questions after the show!

Free Show on the Website:

"Should You Stop Paying Your Home Mortgage". In trouble on your mortgage? House worth less then you owe? You should hear this show. Why not? Its free to you- download it today and get some answers.

All for now,
marc