Inflation agenda: An $81 billion tank of gas
Today's Financial News - Posted March 3, 2009
There is no way to avoid excessive inflation. But that is the way Obama wants it. How else will the president find himself on the billion-dollar bill?
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): This could be an ominous sign of things to come. It is hard to deny that President Obama would love to see his portrait inscribed on America’s currency. Unfortunately, all the most-commonly used denominations have long been reserved for the nation’s founders.
That is why our latest leader is working so hard. He knows there is room on the billion-dollar bill. Now all he has to do is create demand for such an inflated denomination.
If Juan Zamora’s recent credit card bill is a portent of things to come, Obama’s picture could soon be stuffing our wallet. When the man recently filled his vehicle’s fuel tank, he got a call from his credit card company asking if the $81 billion charge was correct.
Isn’t it a bit scary that the company even had to ask?
The way this government is spending taxpayer funds and pumping easy money into the economy, it is tough to find an economist that does not believe nasty levels of inflation are on the way.
Congress is already trying to get rid of the penny. Now it needs to make room for the billion-dollar bill.
An arm, a leg and an Obama
Of course, I am being a bit facetious – but only a bit. There is no doubt American inflation is in the pipeline. We cannot possibly pump trillions of government-backed money into the economy during a time of falling production and not expect a significant surge in the price of everything. By the end of this year, it will be the foremost topic on many investors’ minds.
So how do you fight against the trend? Gold is a good bet. But so are equities. For the last month or so, I have been telling anybody that would listen to sell their holdings and short the equities market. If you did not follow my advice, you know the profit opportunity you missed.
But now my sentiment has changed. We have reached the massive sell-off that officially reset the market. I perused dozens of stories in print and on video last night and could not find a single person saying the clichéd line, “Now is your chance to buy at a discount.”
Yesterday’s horrific action come because there were few people to take the risk of buying stocks. Brokers reported floods of calls saying, “Sell it all.” Nobody wants anything to do with Wall Street, not even speculators.
That means now is the time to get back in on the action. With over 50% of the market’s value slashed in the last year and a half, the downside is greatly reduced. The opportunity to short the markets is much smaller than the profit potential of turning around and going long.
If you are a conservative investor or do not have the knowledge necessary to pick a few winners from a slew of losers, do not try to pick one or two stocks in the hopes of getting rich. Get your hands on an ETF like the SPDR Trust (NYSE:SPY). It tracks the action of the S&P 500.
If you like a bit more speculation and have some trading experience, then join us over at Hot Stock Confidential. We see a huge amount of possibilities unfolding in the current market.
No matter what, you had better be prepared to see Obama’s face in your back pocket for a long, long time. Inflation may not be a concern this month, but once all that taxpayer money hits the streets you had better have a few billion-dollar bills stashed under your mattress.
Next Article: Under Armour: At least you won’t have to pay expensive capital gains taxes
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