Bernacke/Obama want America to walk into the Japanese low interest trap of perpetual recession.

Bernacke/Obama want America to walk into the Japanese low interest trap of perpetual recession.
 It starts by spending the nation’s way into debt until as in Japan the debt exceeds the national income and it is impossible to pay down without national pain.
 That spending spree is only possible by keeping the interest rate close to zero as they do in Japan where the people’s savings are taken by their government and the people get paid next to nothing in interest.
 Eventually the debt is so large the government is trapped and has to avoid higher interest rates because it cannot afford that annual cost of the interest.
 This makes an extremely unstable situation and if the Japanese were to stop saving and buy assets instead, the interest rate would soar and the value of the yen would plummet.
 Obama socialists must be ejected along with the other socialists before the socialists give us perpetual economic recession as the communist Eastern Block had before they went bankrupt. The Japanese socialists have have had a recession for 30 years now.
 The Treasury Department predicts the U.S. will hit its $14.294 trillion debt limit no later than May 16. Government could already begin to shut down this weekend.

If Japan’s interest rate rises just 0.2% on their national debt then 70% of their national income would go just to paying the interest on their national debt.
A shortage of parts from disaster-ridden Japan is very likely to force Toyota to shut down its North American factories and impact roughly 25,000 workers. It’s not clear how long Toyota will be forced to close its facilities.

Warren Buffet is depicted was having become irrational and mentally unstable on GE/MSNBC/Pravda.

Portuguese bonds fell and the cost of insuring the nation’s debt rose to a record and the Euro weakened after Moody’s Investors Service said a bailout is inevitable. The interest Portugal pays on 10-year bonds climbed to 8.76%. Moody’s cut its rating on Portugal’s debt for the second time in three weeks, saying another downgrade may follow and the winner of elections in June will probably tap Europe’s bailout fund with “urgency.” The downgrade “is further evidence of the sovereign decay in the area. The European Central Bank will probably raise interest rates this week to contain inflation.


US Auto & Lt Truck Salesfor March are a week overdue as rumors of a slowdown loom due to Japanese parts shortages. Obama does not want to release the disappointing numbers.
A US government shutdown is looming.
Oil just hit a 30-Month High.


World Markets:
Ireland's ratings were lowered again.

China's stock market prices are in a triangle formation and will breakout probably within a week. At this point we believe the breakout will be down because most of the world is tightening belts now and letting interest rats rise to slow demand for debt. Higher rates will put extreme pressure on countries like the "PIIGS", Portugal, Ireland, Iceland, Greece, and Spain that have done little to balance their budgets. Spain will be the next to fall and socialist unions may riot. The contagion is spreading in the EU. Japan is now a walking debt ridden economic zombie because they took the communist position that everyone should be given a job for life. Unfortunately that leads to nuclear reactors and aircraft problems that kill people because there is no incentive to do a good job when the job is guaranteed.

US Market Highlights

Latest reports
IS Manufacturing Index Mar dropped to 61.2.from 61.4
Construction Spending Feb fell -1.4% or -2.5% depending on whether last -0.7% or the manipulated -1.8% is correct. When the numbers look bad and they take spending numbers they receive and move them backward that is corruption because in another week they will have to adjust the present numbers as well. Either always compare final numbers a week later or compare them at the end of the month. They do but not and could have a 5-wk interval last month and a 3 or 4 week interval this month.
Auto and truck sales still not being reported.

Yesterday
ISM Services industry index fell to 57.3 from 59.7
Fed Minutes indicate the FED is continuing down the path Japan took to perpetual communist style economic depression.
MBA Mortgage Index 04/01 fell again -2.0% after falling -7.5% last month as housing is in a full double downturn.
Crude Inventories 04/02 rose 1.952M after rising last month in spite of the highest April gasoline prices in the history of America. The last time that happened the economy was in a state of free-fall by the end of the year.

This week
Apr 07 08:30 Initial Claims
Apr 07 08:30 Continuing Claims
Apr 07 15:00 Consumer Credit
Apr 08 10:00 Wholesale

Market Outlook April 6, 2011
The stock market is continuing to test its head and shoulders now. From a charting standpoint, some look at the "Very Strong to Very Weak Ratio"" to see if the stock leaders are indeed leading and trending higher. The historical median is 1.36 on a market rally, and it goes above 10 in strong rallies. But it is about 1.06 now.

The markets all appear to be topping out. To us it looks like the 47dma is no longer a support level but instead has become the resistance level for a topping trend (head and shoulders) line.

S&P
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=1y&l=on&z=m&q=l&p=m50&a=m26-12-9&c=

We think the next stock market support level will be down at Nov 4, 2010 levels.

We need to warn you now to liquidate gold and silver when it has run up, not after it drops quickly back to about $400 and $8 respectively.

The success of President Ronald Reagan was due to his selection of intelligent advisors not socialists and gold fell rapidly from $800/oz to $200/ox and stayed very low for almost 20 years. Silver fell back then to $3/oz. President Reagan was a supply-side advocate and ended the artificial shortages that president Jimmy caused in everything from toilet paper, gasoline, silver, and gold.


World Markets
International trade shows that the world economy has only revived about 25% not the 60% shown by the stock and commodities markets. That means more than half of the stock market rise from the 2009 lows is unsupportable and could evaporate. See:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Asian markets were mixed last night. China up 1.1%, Hong Kong up 0.6%, India down –0.4%, and Japan down –0.3%.

European markets are up this morning in a range of about 0.2% to 0.8% half way through their day.

US pre-market futures are up at about 0.7 % at 7:30 AM EST.