Mr. Obama’s two major economic planks are to tax capital, which is seriously short right now, and he is going to protect American workers. What kind of disaster do you need to know? Historically, this has led to disaster. The markets are already tanking partly because he was elected.
Throughout history, history, buying at a selling climax has typically turned out well, at least for a while. The markets are going to rally for a while, but it’s not over. Who knows when things will turn around. It depends on what the politicians do, and so far they are doing all the wrong things.
We are in a period of forced liquidation of all assets. People don’t have the luxury of looking at the fundamentals. They are getting margin calls. What is happening has improved the fundamentals of commodities. Farmers cannot even get loans for fertilizer. Unless the world is in a perpetual economic decline, commodities will do well. In the 30s and the 70s, commodities hit the floor first.
The dollar will be weak, but we are now in a period of forced liquidation. In the last 150 years, this has only happened a handful of time. However, you want to get out of U.S. Dollars eventually, because this is only a short term rally. Look for the classic signs of a top - when everyone is rosy and confident about the dollars.
Bernanke has made things much worse because they have been printing so much money. He and Paulson have ensured that the Dollar is finished. Whatever the government decides to do will be a failure. If they implement exchange controls, that will fail. If they make another currency a world reserve, that will fail.
The recession will be the worst since the second World War. People could buy a house with no money down. They could have no job and buy 5 houses with no money down. The same was true for education loans. The loans were everywhere. In the 1930s, what should have been a normal recession turned into the Great Depression because the politicians made so many mistakes. It is happening again.
