Wow! Today the market expressed what I already said, 5.5 Trillion dollar extra debt by US government did not fix anything, except pay off China and stick it to American tax payer! The DOW Jones down about 280 points. That 5.5 Trillion dollar stick save didn't even last a day. We are once again on deck for all out collapse. If we cross DOW 11,000 strap on for a rough ride. Keep in mind, it will be hard for the government to top the jump the shark moment this past Friday to stop a panic sell at this point. If that doesn't build confidence, only thing left is to make it illegal for stocks to decline, aka Pakistan.
As I previously said, Gold/Oil/etc is not the smart play, since when people need cash, they will sell their resources. In addition, if the resources have demand destruction price is not going to go up. Take a look at the gold chart on the right, this is NOT a positive slope. I would consider Gold ONLY one it hits below 650 an ounce (65 for GLD)
As I stated yesterday, China is having second thoughts on buying Federal US Bonds, next up, Russia is dumping US Debt/Treasuries. I assume that this is a reflection of lack of confidence of the US being fiscally responsible. I can only assume that with them goes the world next. Smaller countries have to be getting nervous if the big countries are abandoning the USA debt. Interest rates will then escalate, which will of course accelerate USA failures. Right now interest rates are not rising, as people buy Federal Notes for "safety" trade.
My comment in my previous blog entry "the US Government will now be the primary go-to person for loans, kinda like a communist country controlling all financial matters." has been echoed by Senator Bunning and economist Roubini. Senator Bunning calls for immediate resignation of Paulson & Bernanke. Nice try Senator, no one cares until the ship is fully ablaze, and right now its only in the engine room. (Odd parallel, I had a conversation on how its wrong to just pander today on completely different topic.)
Next up states are running out of money. Hopefully the Fed can bail the states out, as states run out of funds to pay jobless claims. I can go on an on, Tech spending is going down, US Treasury Credit-Default swaps hit record, OPEC cutting Oil Production, Berkshire Hathaway stops offering Bank insurance for deposits, Cost of Insuring USA debt rising, etc.
The point is, this isn't over, and put your money in a safe place, try TreasuryDirect, and verify your bank is currently ranked stable. The market may rally, it may fall, but the trend is clear, down. What can top Financial Ground Zero as an attempt to rally?