Global financial markets are heading into unchartered territory and volatility is out of control.
Here is a short list of what is currently affecting the markets:
Greece's debt issues are still not resolved, and it's Prime Minister just resigned.
Italy is, "Too Big To Fail and Too Big To Save" and it's long time Prime Minister just resigned.
We have had the historic downgrading of the U.S. debt by the S&P. A second downgrade could come as early as this month.
Leading economists are telling the major media that, "We are in a worse situation then we were in 2008."The United Kingdom witnessed the worst riots it has seen in a generation.
The EU is on the verge of a dissolution.
The U.S. government filed a lawsuit against 17 banks over the mortgage fiasco.
The latest Gallup poll has President Obama's approval rating at an all time low.
And this is all just off of the top of my head.
But the worst problem facing investors, is the credit crisis. As it unfolds, it is shining a very bright light at a much larger problem.
The debt crisis in America is becoming insurmountable.
No one knows where it ends.
At last count, 43 states are staring at monster budget deficits.
S&P's one-notch downgrade of the U.S. sovereign credit rating to AA-plus, while not totally unexpected, adds another level of uncertainty. Loss of gold-plated status for the world's benchmark interest rate risks pushing up borrowing costs on everything from car loans, mortgages and corporate debt to government bonds worldwide.
The world's largest, greatest and safest economy is no longer the safest, close to not being the largest and with the revised GDP numbers from last week, certainly not the greatest.
Just last week $2.5 trillion dollars were wiped off of the global markets.
China is getting in on the bashing...
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.
Xinhua scorned the United States for a "debt addiction" and "short sighted" political wrangling. China, it said, "has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets."
But it looks like the party is about to end. The well has dried up. And no one has a solution...
Governors around the country are slashing budgets like never before.
What's happening in our country today is unprecedented. You have to go all the way back to the civil war to find a time when this many states defaulted on their debt obligations.
And even during the Great Depression in the early thirties, only the state of Arkansas defaulted on its debt! Now our entire country is a few days away from a possible default...
So it appears the day of reckoning has finally arrived for states teetering on the edge of bankruptcy right? Well, maybe not.
Recent Rumblings Coming out of
Washington May Anger You.
Washington May Anger You.
Word is already starting to spread that states may consider bankruptcy as a way to wiggle out of their mess. They believe the Fed will bail them out as they are "too big to fail." Just like the banks, GM, Fannie and Freddie.
In other words, you could be picking up the tab again!
But where is the money going to come from? Today our national debt is more than $14.3 trillion.
The Fed already holds more than $1 trillion dollars of U.S. treasuries - that's more than 70% of all outstanding debt - making it the largest lender to the U.S. in the world.
No it's not China anymore. Heck, they've wised up and don't really have our best interests at heart anyway.
For every dollar the government spends about 50 cents of it is borrowed! Our debt is about 500 times larger than the size of our economy. That's the real story.
But up until recently, most of the mainstream media seem to be missing this. They're fascinated with the rallies, protests, political strategies and senators gone awol, but fail to see how this can seriously affect all Americans. Not only today, but generations down the road.
It's no wonder gold is at an all time high, people are starting to stock pile food in their homes, and the dollar has lost more than 500% of its value since 2001.
Will the Fed once again ignore the will of the American people and bailout the states? Nobody knows for sure. But as in investor, I'm not losing any sleep over it. And neither should you. Let me explain.
Don't Lose Another Wink of Sleep Over
Unrest in the World Today.
Unrest in the World Today.
This summer, the real fireworks began.
With totally unprecedented lowering of the U.S. credit rating, monster deficits and states on the edge of bankruptcy, could we be staring at the tip of the iceberg.
https://www.thephoenixletter.com/offers/worryfree_wfm.php
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