Stock Market tumbles.

Today the Dow Jones plunges more than 500 points while silver falls over $3. The Dow has given up everything it gained this year in less than 2 weeks. Investors are buying into Treasuries sending yields to Oct of 2010 lows. If yields on the 10 year T-bond get to 2% or lower, it would be time to short treasuries if they even get that low. I bet with some more QE; quantitative easing they can get that low. I mean, for crying out loud, the Switzerland national bank and the bank of Japan have both intervened this week in the international currency markets by essentially flooding them with extra capital. Look up "currency war". Now that the US government has raised the debt limit authorizing it to borrow more means the Federal Reserve will create more 'Federal Reserve Notes' (money) out of nothing and loan it to the banks, who then are able to loan the Government, collecting interest. If the stock market slips any more, Bernanke might shoot up the economy with another dose of QE, essentially like Japan and Switzerland. This is why gold is only down 2% during this sell off from an all time high that was reached yesterday. As a matter of fact, the Dow/Gold ratio is now at 6.9. Silver is down more significantly only because it's subject to more volatility. There are some economic numbers coming out tomorrow, unemployment i think, that aren't looking so good. If there was a genuine economic recovery where unemployment got back below 5%, the jobs would be back by now after 3 years. Unemployment is expected to stay at high levels for a few more years. If there hasn't been a real recovery by now, then there isn't going to be one. Ron Paul 2012.

Deficit spending is out of control because of current monetary policy.

Peter Schiff’s analysis of the shenanigans in Washington is great when he says this current debt crisis is nonsense and self imposed. The debate behind the scenes going on inside the big government party is at what pace the borrowing will continue, not if the limit will be raised or not. The debt limit is certain to be increased, the bond markets know this, the banks have been reassured this, Moody’s and S&P know this and most of all, the Federal Reserve knows this. The debt ceiling will be raised, the deficit will grow and the real crisis is when our creditors no longer want to lend the US Government any more money or even if our creditors demand a higher rate of interest. That’s the crisis that is coming if the US government is to raise the debt ceiling and continue on its current path. Its because of the Federal Reserve's loose monetary policy of forcing interest rates down to 0-0.25% and keeping them down that has allowed the US Government to borrow at such a cheap rate. 

The only way to end the never ending deficit spending is if we are willing to take the bad tasting medicine from the good Dr. himself, Congressman Dr. Ron Paul from Texas. It would create the necessary correction in the market to create growth again by balancing the budget, ending the wars and our military presents around the world saving trillions with a T of dollars and thousands of lives. And at the same times restoring the US Constitution and our civil liberties.

But if we continue and the lenders no longer want to lend or demand a higher rate of return to hold US debt, the Federal Reserve will monetize the debt, no doubt. And therein lays the problem. There will be a global dollar crisis brought on by the FED and the government over the last four decades and create hyperinflation for all American's not oblivious to the fact, if deficit spending is allowed to run its course. That's the crisis we will see this decade. The global dollar bubble is the fattiest of them all and certain to pop. Ron Paul 2012.

Last Night’s Presidential Debate

It's only the beginning of May and the presidential electoral season has officially begun. The first Republican debate was held last night and topics ranged from economics and employment to abortion and creation/evolution. The pundits on TV were saying this debate lineup was some type of B-list because it was missing bigger players like newt Gingrich, Sara Palin, Mike Huckabee and a few others. Some of these bigger names in the Republican Party can basically copy and paste their positions from Tim Pawlenty and Rick Santorum who did participate. These guys have cookie cutter policies from George Bush for example. Herman Cain though, is about tackling the problem from a cost/benefit prospective but said himself that he would listen to the same advisers and "experts" that are in the white house. Will he be able to identify that the real problem is our "corrupt monetary system" that allows our government to borrow and spend endless amounts of money on wars, benefits and false economic prosperity at the expense of the middle class all the meanwhile the banks make huge profits and record bonuses? Then will he understand that the solution is to look no further then to the US Constitution and return to the principles of sound money, ultra low taxes, a non interventionist foreign policy and free markets? No one doubts Whether Cain is capable of understanding and solving the problem but we don't have the luxury of being proven wrong. We have heard things we've wanted to hear before from people like Reagan or Bush I and II, I was too young to hear them but you know what I mean, and we still had government expansion, entitlement expansion, wars and monetary stimulus. Ron Paul and Gary Johnson are the only two in the Republican Party running for president that has what it takes to really make a difference, meaningful reform. But Ron Paul is the clear choice here; he is honest and consistent on the principles of economic and social liberty.
The only one who can get us out of just about every war and entanglement around the world and save us from the military industrial complex that Dwight D. Eisenhower so articulately warned us about. Who truly believes the sole root of the problem is the Federal Reserve and the dangers of using a worldwide fiat reserve currency system.

On the bright side

As the first month of 2011 comes to a close, it could have possibly set the pace for the rest of the year. Understand that the U.S economy is basically teetering off the edge which just about any light breeze could tip it right over but these situations could possibly be storms; California, New Jersey and others are on the verge of collapse. The dollar is on a very steep decline which could cause more debate on whether to continue the use of the US dollar as the world’s reserve currency.  Interest rates are on the rise and are at an eight month high. Interest rates’ going north spells disaster for government debt, the housing market and just about everything associated with those two. Oil and other commodities are on the rise as a result of inflation. A higher price for food and gasoline is going to hurt the already high official unemployed at 9.4%, and real unemployed at around 15%. So in other words as far as the economy goes, 2011 will be the year were the beginning of the end takes place but not the end of life. Upon the disaster that awaits us I have been blessed with the knowledge of becoming a father.  Not all is lost; there is still a future, for anyone to conquer.

Price Inflation is coming to town

Reports of price inflation are surfacing around the world from places like; China reporting above 6% inflation and 10% for food. The United Kingdom is reporting higher than expected inflation of 3.4%. Algeria and Tunisia have reported food riots that have left more than 10 people dead. Tunisian president Zine El Abidine Ben Ali has stepped down after massive civil unrest. I know everyone is seeing gasoline prices increase, this is not because of greedy oil and gasoline producers, its inflation, pure and simple. Food producers to grocery stores from Dominoes pizza, Sara Lee, General Mill to SUPERVALU grocery chain have made statements saying that they have to raise prices. Printing money is inflation, rising prices is the consequence. Ben Bernanke has publicly said that inflation is too low and wants inflation to be at around 2% but the truth is that inflation is already at 4-5%. Commodities like sugar, wheat, corn, coffee, soybeans are making huge gains. Just today, cotton is up 2.83%, wheat up 2.59% and rough rice up 3.57%. Don’t wait until the media picks up on this, it will be too late and inflation will be running wild by the time individuals take action. We cannot hope for government to help because government is the source of the problem. There are no signs of our government slowing down their appetite for spending and Ben Bernanke is hell bent on printing money to keep longer term interest rates lower. We are past the point of no return, if Oh-bomb-ah keeps spending and Bernanke keeps printing, that guarantee hyperinflation, if they do nothing, we will see a massive recession or depression.