Financial overseer

If Obama gets his way, the federal reserve will be the watch dog over "all' financial transactions.

For those new to this blog, I blasted Bush as well. So this is not a party thing. I have repeatedly said both parties are corrupt.

This Federal reserve is not even elected. It meets in secret, no press in their meetings, they are appointed...I can go on and on.

We are witnessing the end of the greatest economy ever in the history of mankind. Those seeking power grabs will not stop at just this.

So why the spouting on this blog?? Because it will effect your entire future.

I am beginning to agree with Rogers. Move to Asia (Singapore I think) While masking as communism, they are more capitalistic than we are.

From your retirement accounts to your jobs, we are falling off a cliff here. Better be well prepared. It is going to jolt the masses and you need to be ready. You need to get your house in order.

Inflation/Deflation

This will be a subject talked about. Since the next few months trading depends on getting this right, much will be discussed. As we look at the latest gov figures today, (what part you can believe) we see that inflation did not rise as much as expected. This is deflation winning.

But do not be surprised with another "bailout" "stimulus" from the gov. deflation is much worse in the eyes of the feds than inflation. Problem is the deleveraging is going to take more capital than the feds will be able to pump into it.

So...tangibles will be falling as a result of this latest round. At what point are the feds going to stop pursuing the printing? Who knows.

For now the breather in tangibles should be looked at as a chance to get in. Also the breather in falling bonds should be looked at as a chance to get short.

Time will tell when deflation is defeated. With the credit markets imploding all around, my guess is deflation for longer than most expect.

Housing starts Jump 17%

Yet the market as I write is going down. Why? Isnt this good news? NO! What started this mess? Housing meltdown. It is terrible but builders only know how to build. This will just put even more pressure on an already over supplied housing.

I guess if I was a builder, I cannot make money unless I build, but then those houses need to sell in a glutted market.

This is not the news you wnted to hear in spite of the media spin.

Shorting Bonds

In this weeks newsletter I mentioned that many analysts (ones I respect anyways) feel the trade for the next decade will be short bonds and long energy.

While I agree, I missed the best point on this trade back when TLT was at 123 or so. I am waiting for a nice run up to get along diagonal put spread going on this.

Leaps are not out of the question either. Although those trades take more capital and as such the returns can sometimes lag the shorter 6 months out trades. The nice thing about doing the leaps is you can basically sell way out of the money and only want to capture time decay and let the leap run in the money for a long while.

This should be a very long ride and with those rides, we will see many volatile swings that will make many give up the ship. All the factors are in place to make bonds a bad investment gong forward for a very long time (in my opinion). This Will also effect Cd's at banks and other fixed income investment so steer clear if you can. Annuities would fit into this as well. The locked in rates will lag the upward pressure on interest rates.

As a long term advocate of whole life, it might just be a term and invest the difference decade. Many insurance companies will struggle. Remember that those state funds are for only the guarantee on the policy when a comapny goes belly up. Most of those guarantees are in the 4-5% range.

If you have a universal life policy sold back in the 80's or 90's, you need to have a serious talk with someone and see where you stand.

I would be glad to assist.