Tonight: The Biggest Speech of His Life; What Investors Can Expect
By: profitconfidential | Posted: 23rd November 2011
Most Americans will be glued to the television tonight to see what the leader of the most powerful country in the world has to stay about his plan to get the economy going; in specific, to create jobs.
There is no doubt in my mind: President Barack Obama will be a one-term president unless he delivers on the promises he will make tonight.
The economic situation in the U.S. continues to deteriorate rapidly:
The “underemployment rate,” which includes part-time workers who want full-time work and people who have given up looking for work, sits at 16.2% in the U.S. right now.
Last week, the U.S. Conference of Mayors (which includes the mayors of 1,191 U.S. cities with a population of 30,000 or more each) called upon Obama and Congress to create major road and bridge improvement through some form of transportation bill.
More than 6.3 million households are past due by 30 days or more on their mortgages.
My bet is that Obama will push for huge job creation in the form of huge, multi-billion-dollar programs…infrastructure improvement and help with payroll tax. The Republican-controlled Congress will balk at raising personal taxes to fund these initiatives, so we are eventually talking more debt.
Many analysts are now expecting the Fed to unleash a new form of QE3. This will pump more money into the system as more dollars are printed. Let’s face the facts. The only way our politicians and the Fed know how to stimulate the economy is to spend more and print more money.
Both actions will continue to place immense pressure on the U.S. dollar. Is it any wonder that gold prices have been going through the roof? Does $3,000-an-ounce gold really sound unreasonable now?
Michael’s Personal Notes:
Talk about big numbers…
In a study for the Dallas-based National Center for Policy Analysis, a Boston University economics professor claims that the true debt of the federal government is $211 trillion.
According to Professor Laurence Kotlikoff, the government has been “incurring enormous unofficial debt and using fraudulent deficit accounting to keep these huge bills facing our children off the books.” Social Security and Medicare are two huge government liabilities not on the books of the government.
If Kotlikoff is right, with the Gross Domestic Product (GDP) of the U.S. at $14.0 trillion a year, it would take 15 years of all the GDP the U.S. creates to erase the $211 trillion in U.S. debt.
It’s very disturbing. If the government were a business, under section SFAS 158 of GAAP (Generally Accepted Accounting Principles), adopted in September 2006, it would be required to include on the balance sheet the full net value of pension assets and obligations, measured as the difference between the fund assets and the projected benefit obligation. A company does not have to show the full value of assets and the full value of liabilities—just the net of the two. The government is special—it doesn’t need to show its pension liabilities to the public.
Hence, when we hear that our “official national debt” is $14.5 trillion, it’s only the tip of the iceberg. Our true debt is 14 times that amount. It’s a U.S. debt crisis. How can the U.S. dollar sustain itself under this mountain of debt? It can’t. That’s what the rise in the prices of gold investments and gold stocks has been all about.
Where the Market Stands; Where it’s Headed:
The Dow Jones Industrial Average opens this morning down 1.3% for 2011. It is my opinion that the bear market rally in stocks that started in March 2009 remains intact. Despite this bear market being “long in the tooth” and tired, it still has life left in it. Stock market investment returns are limited at this point. The easy money in the stock market has been made (mostly in 2009). I estimate that the market could advance 10% from here on the upside before the bear finally retires this phase of its cycle.
Critical Warning Number Six!
Something very big will happen in America within the next 180 days.
It will be more devastating than the credit crisis of 2008. For most people, it will hit them like a brick wall. It will touch Americans harder and deeper than anything else we’ve seen since the Great Depression. We feel so strongly about this, we've decided to present our "Critical Warning Number Six" in a new video.
Get your FREE report to see Critical Warning Number Six immediately here.
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Tags: economic situation, personal notes, full time work, job creation, time workers, doubt in my mind, payroll tax, immense pressure, big numbers, gold prices, barack obama