Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

After U.S. Debt Ceiling Agreement - What's Next?

Politics / US Debt Jul 31, 2011 - 02:46 PM GMT

By: George_Maniere

Politics

           Before I begin I want to say to my readers that I believe our founding fathers believed that serving in the government was a privilege not a profession. Sadly, when I look at our government I see people in elected office that by any measure have no practical experiences in life. I look and see people that have groomed themselves for a life in the political arena and for the most part their careers have been carefully orchestrated to lead them down that path. As with any generalizations there are exceptions. I am sure that there are members of Congress that had a life in business before they ran for political office. I will use a random example of Speaker of the House John Boehner.


John Boehner was born in Reading, Ohio, the son of Mary Anne and Earl Henry Boehner. He was the second of twelve children in a family of German and Irish descent. He grew up in modest circumstances, having shared one bathroom with his eleven siblings in a two-bedroom house in Cincinnati. His parents slept on a pull-out couch. He started working at his family's bar at age 8, a business founded by their grandfather Andy Boehner in 1938. He has lived in Southwest Ohio his entire life. All but two of his siblings still live within a few miles of each other; two are unemployed and most of the others have blue-collar jobs.

Boehner attended Cincinnati's Moeller High School and was a linebacker on the school's football team. Graduating from Moeller in 1968, when U.S. involvement in the Vietnam War was at its peak, Boehner enlisted in the United States Navy but was honorably discharged after eight weeks because of a bad back. He earned his B.A. in business administration from Xavier University in 1977, becoming the first person in his family to attend college, taking seven years to graduate as he held several jobs to pay for his education.

Shortly after his graduation in 1977, Boehner accepted a position with Nucite Sales, a small sales business in the packaging and plastics industry. He was steadily promoted and eventually became president of the firm, resigning in 1990 when he was elected to Congress.

           I believe my job in writing these articles is to report the facts as I see them and keep my political opinions to myself. I want it made clear that I am not choosing sides here and this is not meant to be an endorsement of Mr. Boehner. Having said that, in my opinion, I believe Mr. Boehner is an example of what the founding fathers envisioned for the type of person that would make a good representative of the people of this country.

As I write it is painfully obvious that there will be an agreement reached on the debt ceiling. While the media is doing what they do best, reporting doomsday scenarios and peddling their fear mongering stories that are carefully crafted to keep people “tuned in” all in the name of selling soap and toaster ovens.

           The probability of whether there will be a compromise is very high. No one wants their finger prints on anything that could remotely be responsible for anything that could wreak havoc on the American people and the financial markets.  What however the member of both parties have done quite successfully in their zeal to get some prime time face time is to make us look weak in the eyes of the rest of the world. While some agreement is all but assured the prospect of S&P downgrading our debt from its century old status of “AAA” to “AA” is still a real possibility. The question remains what will pension funds, insurance companies, and other institutions that are mandated to hold only “AAA” rated holdings going to do if S&P, Moody’s and Fitch decide they will lower our credit rating to “AA” due to the theatrics in the U.S.?

           I can only conclude that if the United States were to be downgraded the countries that hold our debt would be much less likely to buy more. This would be a catastrophic scenario for our country because we would have to raise the interest rates paid on our treasuries which would have the effect of sparking interest rate hikes throughout our economy. Credit card debt would rise, interest on student loans would rise, and worst of all the interest rates, which are the life blood of small businesses, would rise. This would be a calamity for our already fragile economy.

The GDP numbers reported on Friday were dismal. The first quarter numbers were revised down to an anemic 0.04%. That is barely a positive growth number. That does not sound like a recovery to me.

Sadly, if our credit loses its “AAA” rating we will have the Congress to thank as I see this as a media circus that was perpetrated by them to garner TV face time and save face with their constituency.

So before I conclude this essay, I want to urge my readers to continue to be long physical Gold and Silver and look to hold their positions in the Gold ETF (GLD) and buy the Silver ETF (SLV) on any pullback to the $38.00 level or lower. I see this debt ceiling media circus playing out this way. Once there is some agreement reached we will experience a short term “relief bounce” and the dollar will temporarily strengthen and gold and silver will momentarily sell off as there is an inverse correlation to gold and silver and a strong dollar. I would look at this as an opportunity to buy SLV under $38.00 I would only be a buyer of GLD at $144.00.  After the one day euphoria subsides and everyone realizes that fundamentally nothing has changed the market will sell off with a vengeance. I urge all to keep a watchful eye on the S&P VIX and when it gets to 30 start dollar cost averaging in as the market sells off. One of my readers wrote me that he sees the VIX reaching fifty so do not go all in at thirty but patiently buy in small increments as the market sells off. Once the market has sold off Dr. Bernanke will have no choice but to initiate QE3 and that is when the market will take off.

By George Maniere

http://investingadvicebygeorge.blogspot.com/

In 2004, after retiring from a very successful building career, I became determined to learn all I could about the stock market. In 2009, I knew the market was seriously oversold and committed a serious amount of capital to the market. Needless to say things went quite nicely but I always remebered 2 important things. Hubris equals failure and the market can remain illogical longer than you can remain solvent. Please post all comments and questions. Please feel free to email me at maniereg@gmail.com. I will respond.

© 2011 Copyright George Maniere - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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

6 Critical Money Making Rules