I’ve been a huge football fan for years. I started watching Dallas Cowboys games when I was five because I loved the star on the team’s helmets. I cheered for the Miami Dolphins because I live in South Florida. And then after I went to college in Boston, I adopted the New England Patriots as my team — an affiliation that carries to this day.
One thing I’ve always hated to see was when the game would be corrupted by steroids. I remember when Lyle Alzado of the Los Angeles Raiders struck fear into the hearts of opposing teams in the early 1980s. But it turned out his aggressive style of play and incredible strength turned out to stem largely from drug use. He died a broken man of brain cancer at 43.
It’s not just football, either. How many baseball greats are now turning out to be nothing more than juiced-up pretenders? Heck, even cycling great Lance Armstrong is under a cloud today due to doping allegations made by former teammates.
It’s truly sad, and in the end, what’s the point? Why try to get an unfair edge if it just ends up killing you in the end? Or if your medals and rings and trophies just get stripped away?
Why am I bringing this up?
Because we’re seeing the same, sorry thing happen here to the U.S. economy! Washington has been trying to pump the economy full of easy money for the better part of two years now. Yet it hasn’t worked! And despite all that, the addicts on Wall Street are once again jonesing for another hit!
What’s going to happen in the markets as a result? What does this mean for you? And most importantly, what can you DO about it? Here’s my take …
Why You Can’t Keep Propping
up an Ailing “Player” Forever
Beginning in March 2009 and continuing all the way through present day, Washington has been trying to juice the economy. It began with the bogus “stress tests.” They helped spike the value of bank and real estate stocks, allowing companies to sell equity and buy themselves some time.
 |
| We were told the trillions in stimulus programs would cure our economic woes. |
It continued with the $1.25 trillion QE1 program … the $600 billion QE2 boondoggle … payroll tax cuts … the HAMP mortgage modification effort … an almost-$900 billion economic stimulus bill … and more.
We were told these would drive unemployment down substantially.
We were told these would prevent a double-dip in housing.
We were told these efforts would — for once and for all — plug the massive balance sheet holes in the banking system.
We were told there would be virtually no negative side effects.
And we were told months ago that the economy had entered a self-sustaining, healthy recovery.
But Treasury Secretary Timothy Geithner … Federal Reserve Chairman Ben Bernanke … President Obama’s economic advisors … and virtually all the major Wall Street economists got it wrong. All we did was pump the economy up with monetary steroids — buying us some short-term performance at the cost of long-term health.
We’re now $14.3 trillion in debt, and Geithner is raiding every government account he can to keep us under the debt ceiling. Plus, we’re running up a trillion-dollar deficit for the third straight year, something no country in the history of the world has ever done.
And what do we have to show for it?
- A confirmed double-dip in housing,
- A rising cost of living,
- A renewed jobs market threat, with unemployed Americans taking a record-long amount of time to find work,
- And a fresh roll over in bank stocks, with companies like Bank of America giving up every penny of gains they’ve made in the last two years.
Wall Street’s Plea: “Brother, Can
You Spare Some More QE?”
Bottom line: The print, borrow, spend program is NOT working! Yet in the wake of the dismal May jobs report, Wall Street is back to begging Helicopter Ben Bernanke for more free money! And when they don’t get it, like some spoiled kid, they take their toys and go home.
 |
| On Tuesday, the Fed chairman offered no hint that QE3 would be forthcoming. |
Just witness what happened late Tuesday …
Bernanke gave a speech on the economic outlook at the International Monetary Conference in Atlanta. He said the economy appeared to be weakening again, but failed to promise QE3. Result? Stocks rolled over into the close.
Meanwhile, the same economic “experts” like Paul Krugman who told us that if we just borrowed, printed and spent enough money, everything would be fine, are still at it. They’re asking for even more of the same medicine that didn’t work in the past … twice!
Look folks, the plain, unvarnished truth is that our economy needs a long period of convalescence to heal. We need to work off the massive excesses built up during the tech stock and real estate bubbles. All the steroids in the world won’t do the trick!
Fortunately, you CAN take steps to protect yourself. You can avoid losing money if stocks and the economy sink. In fact, you can turn lemons into lemonade and rack up profits from fading sectors like real estate, banking, consumer durables, and more.
That’s what I’m already helping my subscribers do — and if you’d like to join them for just $2.73 per day, click here to learn more.
Your other option?
Sit by and do nothing while Washington and Wall Street sink further into the debt, deficit, and downturn abyss. I trust that sounds as unattractive an option to you as it does to me.
Until next time,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
{ 5 comments }
You Weiss pundits must be reveling at this market correction feeling like you finally made a good call on the direction of the Dow.
That doesn’t change history and how wrong you folks were about the Dow going to 5K in the Summer of 2009 when it was actually going then from 8K to close to 10K at yearend.
I’ve done pretty good, listening to these guys. Are You Not Listening to what they are saying?
The Only reason the Markets went up was due to the Artificial Stimulants that the FED threw into the mix.
They gave Severe Warnings to get out of the Markets in the Final Week of September 2008.
A Week later, the Markets took a Dump…
Meanwhile, all this Artificial Flooding of Cash, is destroying our purchasing power.
LeapZep,
You may have done well in Q4 of 2008 but if you followed their advice from Q2 2009 onward, you missed a very nice bull run. In fact, if you went contrarian like they advised folks suggesting the Dow was going to 5K, then you would have also lost money.
To this day, W has not divulged the results of their Million Dollar Contrarian Fund begun in Q2 2009.
You would do better tossing darts to pick financial moves rather than listening to these guys!
Mike
Many thanks for your continuing commentary. I pick our the things that help me and have done pretty well following your advice. Thanks once again