Saturday, September 20, 2008

$700 Billion Dollars

That is the amount the Government wants to come up with to throw at this problem in our markets.

Think about that amount for a moment. Think about how much money that is. Realize that our Gross Domestic Product for an entire YEAR is only $13 billion. Think about raising the cap on our National Debt to $11.3 trillion to cover this amount.

We're in the hole. Really, truly in the hole. It's a very deep hole. And we're still digging.

And in response, Democrats say that they want to add, ADD!! money to that bill to bail out homeowners that can't stay in their homes?!?! Are you serious? What good is throwing money at people who made a mistake and can't afford their house going to do? They STILL won't be able to afford their house. They'll STILL have to sell it at a loss. And taxpayers will still be left holding the bag.

Folks, we've got a serious problem here. We are owing more and more money to the various nations of the world. And we really don't have it to pay them back. We're in a credit prison of our own making, and before long, I suspect these Nations aren't going to want to give us any more.

What then?

What then do we do when the tap of foreign investment gets shut off?

We either print money to cover the overrun, which would cause disastrous inflation, raise the hell out of taxes, destroying business as we know it (and likely making homeless and starving a fair portion of our population) or we let our infrastructure, the social programs, the pork, the ear marks, the Government as a whole die for lack of funding.

This bailing out and dumping money at things HAS TO STOP.

Our markets must adjust. They must fall, and they must adjust. We appear now to be operating under the assumption that growth, and market increases, and profits from those markets must always go up. The profits have to keep coming in. This can't happen. That condition does not exist in nature. We got a wake up call earlier this week when the market plunged. And instead of letting it correct, instead of letting businesses that are now insolvent and are more debt than assets fail and dissolve as they must, we threw money at them. We tried to keep them alive. That was the wrong thing to do.

When hints of this bold, new mistake were leaked yesterday, the markets roared back. The numbers were being trumpeted from everywhere as if they represent what is really happening.

They don't.

Despite the rises in the market, the dollar sank. Crude oil was up 7%. The world is not fooled.

I suspect, if this new bill goes through, we are not going to see the results we were hoping for. I'm no market expert, I'm certainly no financial wizard, but I know how to listen. And underneath all the hype of those gains yesterday, I'm hearing some real worry. I'm hearing some very cautionary notes coming from many sources regarding the potential for inflation out of this mess. And that potential is very high.

I'd like to be able to say that I trust our Government to make the right moves here. But then the Dems go and announce that they want to continue the same, failed policies and add worthless, expensive gestures to this bill. They are not taking this seriously. They have not opened their eyes to realize that it was the insistence that everyone own a house is part of what got us into this mess.

Our Government, as a whole, has failed this nation miserably. They have failed to properly ensure that all of the debt that is currently being hidden from the public books of these companies was reported, they have failed to stop Fannie Mae and Freddie Mac from operating in a fraudulent manner, and their failure may be the end of this nation as we know it.

Keep your powder dry folks. I have a bad feeling that things are going to get a whole lot worse before they get any better. I sincerely hope I'm wrong on this one.

I'd recommend everyone take a read at this article over on The Market Ticker. I don't understand everything this guy is saying, but it makes a ton of sense to me.

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