Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Investor Moves to Make Before Debt Ceiling Debacles Disfigures Your Portfolio

Portfolio / US Debt Jul 27, 2011 - 07:36 AM GMT

By: Money_Morning

Portfolio

Best Financial Markets Analysis ArticleKeith Fitz-Gerald writes: One night at dinner a few years back, my Dad, Greg Fitz-Gerald, explained exactly why the "tax-takers" in Washington think that recoveries, bailouts, negotiations and stimulus packages are a good idea - while the taxpayers believe just the opposite.

"When you rob Peter to pay Paul, Paul generally thinks this is a good idea," he said.


When we look at the debt-ceiling debacle that's unfolding in Washington, you can see exactly what my Dad was saying. That's why I'm not going to mince words here: The debt debate is a complete sham and an utter disgrace. A costly reckoning is headed our way.

The country can't avoid the fallout.

But you can.

In fact, I'm going to show you three moves that will help you dodge the worst of the damage - and perhaps even profit.

Appalled and Disgusted
That our tax-taking leaders would play political chicken with our national wealth and our future is appalling and disgusting.

The sad thing is "they" could fix this in a New York minute if they really wanted to. It wouldn't be pretty nor would it be the "best solution," but it would be a start - especially when it comes to the bond markets, which are blithely going about their business.

Evidently somebody has forgotten to tell the traders who run this $3 trillion party that their world is about to change. The very notion that we should have stability flies in the face of everything we know about the political incompetence that now threatens it.

Moreover, Lipper Inc. notes that bond market inflows are about $4.46 billion a week - and that's just the taxable stuff. There's another $99 billion worth of two-year notes on the block this week, and they're all likely to be purchased by investors seeking "safe-haven" investments.

.In an era of trillion-dollar liabilities, I find it incredibly ironic that anyone would seek safety in the U.S. dollar, let alone in U.S. government paper. Yet, that's exactly what's happening.

I usually refer to situations like these as processes of limited choice. But in reality it's more like one choice: taking our medicine now, or taking it later. Kicking the can down the road will not help.

The way I see things, there are no longer any really good choices. In fact, the only logical choice is for all of us - and especially the U.S. government - to stop living beyond our means.

When we (the taxpaying citizens) spend money, we buy goods and services. When the government spends the money that it's collected from us, it buys votes.

In the weeks and months to come, we're going to find out for sure exactly whose spending is better for the economy. But I'll make a prediction: It isn't the government's.

Unfortunately, fixing this requires change. And change isn't something that any of us - our leaders included - have been particularly good at ... at least not short of a crisis that forces change.

But that's very much the world we live in. We want for our political fixes to be quick and easy.
If the nice man or woman on Capitol Hill wants to vote in such a way that we feel no pain, we're all over it. Never mind that we'll actually have to pay for this someday.

The problem is one that I have addressed time and again, and this is what's at the core of the debt debate right now: Political fixes cannot by their very nature be quick and easy.

That's especially true when they are long-cycle, which means they've taken years to form and will take years to work their way out of the system either by chance, design, growth, or some combination of all three.

We don't need our own version of a Greek vacation: Is anybody in Washington listening?

Three Steps Toward Debt-Ceiling Security
Given this rather dour outlook, the best thing you can do is to protect yourself, and those in your household. To do that, I'm suggesting three moves that are worth making in advance of the Aug. 2 debt-ceiling deadline.

You need to:

•Hedge Your Bets: If Washington blows it, U.S. Treasuries will suffer, with the long end of the curve getting whacked hardest. The Rydex Inverse Government Long Bond Strategy Fund (NYSE: RYJUX) will profit as that happens, and can be used in conjunction with existing portfolios as a hedge.
•Go For The Gold: Metals - especially gold - will take on new significance if fiat currencies fail, and the SPDR Gold Trust ETF (NYSE: GLD) is a good way to capitalize on the surge that we'll see. But be leery of overstaying your welcome. If failure at the negotiating table or a default appears imminent, this could shoot for the moon; but if an agreement is reached, gold could fall faster than Representative Weiner.
•Get Some Kicks From the VIX: The iPath S&P 500 VIX Mid-Term Futures ETN (NYSE: VZZB) is truly a day trader's choice that may be best immediately preceding the deadline - but certainly not much longer than that. Prices reset daily, making tracking a problem.

[Editor's Note: If this is the kind of financial-market intelligence that you demand, you need to be reading The Money Map Report. Our monthly newsletter gets behind the stories and looks at the trends and powerful global money flows that are creating some of the best investing opportunities of our lifetimes. Those trends - as well as some great protection tips - will leave you better-informed, safer and wealthier than you've ever been.

You can get this market intelligence delivered to you monthly with our affiliate, the The Money Map Report. Please click here to learn more about our latest offer.]

Source :http://moneymorning.com/2011/07/27...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 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