He who is willing to sacrifice financial freedom for safety deserves neither.

Asian and European markets are in decline as the USA declines BBC and Scandinavian suggestions that socialism and much higher taxes is what Americans need.


We expect another down day today on Wall Street as Senate Democrats reject the Republican counter offer to avoid chapter 11 bankruptcy but still force concessions that restore auto industry profitability. We said earlier that these proceedings by a lame duck Congress were a disaster and that president elect Obama needed to stop the useless proceedings of his party because all they did was create doom and gloom not solutions.

The bailout is a scandal. A few years ago Chrysler was a German car subsidiary. It was sold at a bargain price to a hedge fund. This little bail out bridge offered Chrysler by congress is already more than what that hedge fund put up in equity to buy Chrysler. It smells rotten like more corruption. The union members now retire early with pay and benefits. So now there are more than three retired or unemployed autoworkers getting close to full salary for every working autoworker.

But it is much worse than just that. We are talking about $billions in profits for the hedge fund owners, paid for by US taxpayers. No wonder so much Wall Street and Soros money flowed into the campaign this past year. Now Soros and the rest want the US taxpayer to pay them back with interest for giving us the best congress that money could buy.

It will be interesting to see if GM is in Chapter 11 bankruptcy proceedings by January as they threatened Congress. They have not even begun to explore the Chapter 11 process so how can the American people believe that GM had any intention of making themselves solvent, ever. Chapter 11 will allow them to survive by restructuring and having people work rather than getting paid for doing nothing.

A more serious concern now is the US Treasury bubble that is forming.

Consider the billions of treasuries sold at low, zero, or even negative interest rates. That is a bubble waiting to pop and drive up interest rates when the frightened fools jump ship again. The US Treasury should be selling longer maturity bonds now so that debt does not come due suddenly and cause a credit squeeze or the printing presses to over heat.

The great demand for USA debt instruments has caused the interest rates on them to turn negative. Yes, some very strange people are so afraid of equities and other currencies and are so confident in the safety of Treasuries that a bubble is forming and it will likely pop. They clearly are plain fools because the USA does not have to default for them to lose their shirts. All that needs to happen is for the stock markets to surge, interest rates to rise, or there is suddenly some great news. Then everyone will want to get rid of their treasuries and back into stocks.

Then those holding the virtually worthless 0% interest treasuries who happen to lose their job or house will be forced to sell their treasuries at a fraction of their principal value. It is no different than when the hedge funds were forced to sell everything because many fools paniced and sold all their hedge funds creating great losses for themselves and others just to go into the treasuries. Money market investments pay interest and are now insured.

He who is willing to sacrifice financial freedom for safety deserves neither.