Watching President Obama and Secretary Geithner and Senate and Representative Leaders mapping out a multi-pronged governmental approach virtually identical to the actions that led to the 1930's Great Depression is genuinely a terrifying experience. I picked a really poor day to stay at home.
The news reports are restrained (read Five Reasons the Markets Don't Like the Bank Bailout)when compared to the discussions I've had with financial experts behind the scenes. The panic is real. And the markets show it.
The government cannot spend their way out of this crisis. In fact, the more the government spends, the deeper and longer the crisis will last. Geithner's signals of future bailouts really terrifies virtually every economist not on the administration's payroll.
Famed investor and global economic analyst Jim Rogers predicts Government Bonds May Be Last Bubble. If he is even partially right, it would mean the collapse of the United States.
Investors will have to short government bonds at some point despite their current attraction, as the amount of debt issued is "staggering" and inflation risks are down the road, Jim Rogers, CEO of Jim Rogers Holdings, told CNBC Tuesday.
"I'm buying gold just because I'm periodically buying gold, because I do expect it to be much higher over the next decade," Rogers said, adding that history has never seen all major central banks printing money "as fast as they can" at the same time.
Rogers is right. We are not going to be able to finance this level of national dept. In effect, the government is merely printing money and massive inflation is absolutely guaranteed. Rogers is wise to signal a move to buy more gold.
I believe we really must defeat the massive inflation package masquerading as a stimulus plan. Once again I suggest you call your Representative and Senator. Tell them to delay or vote against the Stimulus Package. We need Democrats to break with the President and vote with the Republicans. That is damned tough for them to do, but our very future depends on it.
Then we must demand a whole lot more from President Obama and Treasury Secretary Geithner.