Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investor Moves to Make Before Debt Ceiling Debacles Disfigures Your Portfolio

Portfolio / US Debt Jul 27, 2011 - 07:36 AM GMT

By: Money_Morning

Portfolio

Best Financial Markets Analysis ArticleKeith Fitz-Gerald writes: One night at dinner a few years back, my Dad, Greg Fitz-Gerald, explained exactly why the "tax-takers" in Washington think that recoveries, bailouts, negotiations and stimulus packages are a good idea - while the taxpayers believe just the opposite.

"When you rob Peter to pay Paul, Paul generally thinks this is a good idea," he said.


When we look at the debt-ceiling debacle that's unfolding in Washington, you can see exactly what my Dad was saying. That's why I'm not going to mince words here: The debt debate is a complete sham and an utter disgrace. A costly reckoning is headed our way.

The country can't avoid the fallout.

But you can.

In fact, I'm going to show you three moves that will help you dodge the worst of the damage - and perhaps even profit.

Appalled and Disgusted
That our tax-taking leaders would play political chicken with our national wealth and our future is appalling and disgusting.

The sad thing is "they" could fix this in a New York minute if they really wanted to. It wouldn't be pretty nor would it be the "best solution," but it would be a start - especially when it comes to the bond markets, which are blithely going about their business.

Evidently somebody has forgotten to tell the traders who run this $3 trillion party that their world is about to change. The very notion that we should have stability flies in the face of everything we know about the political incompetence that now threatens it.

Moreover, Lipper Inc. notes that bond market inflows are about $4.46 billion a week - and that's just the taxable stuff. There's another $99 billion worth of two-year notes on the block this week, and they're all likely to be purchased by investors seeking "safe-haven" investments.

.In an era of trillion-dollar liabilities, I find it incredibly ironic that anyone would seek safety in the U.S. dollar, let alone in U.S. government paper. Yet, that's exactly what's happening.

I usually refer to situations like these as processes of limited choice. But in reality it's more like one choice: taking our medicine now, or taking it later. Kicking the can down the road will not help.

The way I see things, there are no longer any really good choices. In fact, the only logical choice is for all of us - and especially the U.S. government - to stop living beyond our means.

When we (the taxpaying citizens) spend money, we buy goods and services. When the government spends the money that it's collected from us, it buys votes.

In the weeks and months to come, we're going to find out for sure exactly whose spending is better for the economy. But I'll make a prediction: It isn't the government's.

Unfortunately, fixing this requires change. And change isn't something that any of us - our leaders included - have been particularly good at ... at least not short of a crisis that forces change.

But that's very much the world we live in. We want for our political fixes to be quick and easy.
If the nice man or woman on Capitol Hill wants to vote in such a way that we feel no pain, we're all over it. Never mind that we'll actually have to pay for this someday.

The problem is one that I have addressed time and again, and this is what's at the core of the debt debate right now: Political fixes cannot by their very nature be quick and easy.

That's especially true when they are long-cycle, which means they've taken years to form and will take years to work their way out of the system either by chance, design, growth, or some combination of all three.

We don't need our own version of a Greek vacation: Is anybody in Washington listening?

Three Steps Toward Debt-Ceiling Security
Given this rather dour outlook, the best thing you can do is to protect yourself, and those in your household. To do that, I'm suggesting three moves that are worth making in advance of the Aug. 2 debt-ceiling deadline.

You need to:

•Hedge Your Bets: If Washington blows it, U.S. Treasuries will suffer, with the long end of the curve getting whacked hardest. The Rydex Inverse Government Long Bond Strategy Fund (NYSE: RYJUX) will profit as that happens, and can be used in conjunction with existing portfolios as a hedge.
•Go For The Gold: Metals - especially gold - will take on new significance if fiat currencies fail, and the SPDR Gold Trust ETF (NYSE: GLD) is a good way to capitalize on the surge that we'll see. But be leery of overstaying your welcome. If failure at the negotiating table or a default appears imminent, this could shoot for the moon; but if an agreement is reached, gold could fall faster than Representative Weiner.
•Get Some Kicks From the VIX: The iPath S&P 500 VIX Mid-Term Futures ETN (NYSE: VZZB) is truly a day trader's choice that may be best immediately preceding the deadline - but certainly not much longer than that. Prices reset daily, making tracking a problem.

[Editor's Note: If this is the kind of financial-market intelligence that you demand, you need to be reading The Money Map Report. Our monthly newsletter gets behind the stories and looks at the trends and powerful global money flows that are creating some of the best investing opportunities of our lifetimes. Those trends - as well as some great protection tips - will leave you better-informed, safer and wealthier than you've ever been.

You can get this market intelligence delivered to you monthly with our affiliate, the The Money Map Report. Please click here to learn more about our latest offer.]

Source :http://moneymorning.com/2011/07/27...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in