The markets traded flat for the week and held gains trading sideways. The overall market volume was light and SPY (S&P SPDR) held and had trouble breaking 129.42 resistance of Oct 2011 high, it had a pre market of over 130 on Thursday before dropping later in the trading day. On Friday we had news of downgrades by S&P to 9 European nations, this ultimately caused the markets to open lower pre-market on anxiety in Europe caused by sovereign debt. This caused investors to jump into the U.S Dollar , the UUP (US Dollar Pro Shares) traded over 1.04% in the day its highest level since September 2010, the Euro hit a new 16 month low.U.S treasury bonds continued to rally, the irony of this is that the U.S government is able to borrow more for 10 years below 2% and for 30 years below 3% in that regard the United States is able to get in even bigger debt , far bigger than what the E.U is yet the investors are more worried about Europe and insist that the U.S economy is strengthening and regard US treasuries as safe haven when the U.S is not able to repay its debt. This is merely just smoke and mirror effect , three nations in the E.U have higher credit rating of AAA those are Germany, Netherlands and Finland. France and Austria had there rating cut to AA+ equal to that of the United States. There are only 2 nations that have higher rate of debt to GDP to that of the United States and that's Greece and Italy.
Fundamentally there are reasons for the U.S to be rated lower because the only US treasuries are the only debt considered when figuring out rate of debt to GDP, Fannie and Freddie Mac are not taken into consideration , which is likely to reach 6 trillion and the 1 trillion dollars of Student loan debt that is obligated and guaranteed by the U.S goverment that is off the books. There will be a lot of defaults on both housing and college loans that ultimately the tax payer will eventually be responsible to pay back. This is not considered part of our debt and guaranteed money is far worse than the debt from treasuries.
Now we move on to contingent liabilities such as Social Security and Medicare obligations which the United States is obligated to pay. The Federal government and the states also have obligated debt , therefore we have a higher credit rating than E.U yet we have more debt and obligations therefore this is virtually unsustainable yet everyone buys the dollar as a safe haven. The illusion is that our interest rates are artificially low compared to that of France which borrow 50% more than the United States, making the United States look like a stronger economy. So the U.S is spending more borrowed money. Now imagine if there was no money to borrow , or if interest rates are raised?
Now President Obama is requesting to Congress to raise debt ceiling 1.2 trillion just to get us through the end of the year. This week we had another Economic Data that came in, the Trade deficit numbers for November jumped 10% to just under 48 billion high yet the dollar rallies , this ultimately shows the strength of the economy getting weaker. I am not saying that Europe is not that bad just that the United States is worse than what the mainstream media is reporting.
With all this said , The Federal Reserve continues to insist of growing economy all while manipulating interest rates to artificially low prices. The U.S government continues to add to a failed foreign policy continuing to add to government spending. The Fed bailouts and quantitative easing (printing dollars) will continue devaluing the currency in order to continue to prop up markets and devalue during a currency war in order to compete with imports and exports globally.
The United States now is entering a election year with tensions in the Middle East brewing with Iran all while continued wars in Iraq, Afghanistan, drone attacks in Pakistan. Troops are being sent to all parts of the world specifically operations in Syria, Central Africa, Australia and Pacific Asia. Recent passing of bills like the NDAA (National Defense Authorization Act) undermine civil liberties greater than continued policies of President Bush Patriot Act. We are witnessing more laws targeted to free speech like SOPA ( Stop Online Policy Act). The Enemy Ex-Patriation Act HR 3166 and S. 1698 is a bill being looked at in Congress all for the safety of Americans.
We are glad to endorse Dr Ron Paul for president in the 2012 election as we believe he is the only candidate that speaks strongly against a failed foreign policy, The Federal Reserve, and bills that are being secretly passed via Congress that undermine the Civil Liberties and most importantly the Constitution. The mainstream media fails to cover Dr Ron Paul and smears his credibility all while supporting the status quo and the establishment. Although some may say that Dr Ron Paul is radical, he abides and is a strong supporter of the U.S Constitution and stands by his principles never being corrupted by lobbyist and big corporations. Since the 1980 Dr Ron Paul has been speaking about dangerous Foreign Policy, Federal Reserve devaluing the currency. Congressman Paul never voted for Bills that undermine civil liberties such as the Patriot Act and the NDAA. He warned of the Housing Bubble years before the collapse and voted against the Banker Bailouts that added all the fiscal responsibility to the tax payers.. The Economy is getting worse and every citizen will be effected if the wasteful spending continues, foreign policy continues it will bankrupt the US sooner than expected. If the Federal Reserve is not audited and continues to devalue the currency, many will work harder and there money will be worth far less. Many say that his foreign policy is dangerous, that he is an isolationist, this is far from the truth as he strongly believes that only Congress has authority to declare war. He does not believe that a president should use an executive order to go to war. I believe with his vast knowledge of Austrian Economics, Military experience in the Air Force, and knowledge of the Constitution he can lead this country out of debt and bring back prosperity with a stronger national defense.
We hope that members research Dr Ron Paul with an open mind and if they do think he is a better candidate than the rest of the establishment to spread the word and also donate few dollars
https://secure.ronpaul2012.
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