February 2009 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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  • Who Will Buy America’s Trillions In New Debt?

    Since taking office on January 20, President Barack Obama has proposed new government spending of almost $3 trillion dollars. Yes, $3 trillion consisting of his $787 billion "stimulus" package, up to $2 trillion in bank bailouts proposed by Treasury Secretary Geithner earlier this month, and another $275 billion for homeowners and mortgage companies that Obama announced last week. The question is, who is going to buy this gargantuan amount of US Treasury debt over the next few years? With the global recession, the largest foreign buyers of Treasuries, like China, Japan and Europe, may not be in a position to keep buying our debt. It now appears the US Federal Reserve will be called upon as the "lender of last resort," but the Fed will be forced to print these trillions in new money. That could trigger another round of big inflation (hyperinflation, some predict) in the coming years. This week, I will explore the implications of this record spending and borrowing. Be warned that what follows is not pretty, but it is what it is. The latest plunge in the stock markets is indicative of just how precarious the situation is. As investors, we need to understand what is happening and how to react to it. Let's get started....
  • Throwing Trillions Around Like Crazy

    President Obama will sign into law the largest single spending bill un US history, $787 billion, today in Denver. No one knows if it will work. Last Tuesday, Treasury Secretary Tim Geithner announced a massive bank bailout plan that will spend $1.5-$2 trillion or more, but he failed to provide many details on how this rescue package will work. The stock markets have been in a tailspin ever since. There is growing talk of nationalizing many of our large banks. While I'm against nationalization, I have included a very interesting article by Dr. Nouriel Roubini, a well-known economist. I think you should read it, if for no other reason than to be informed on the subject....
  • Support Wanes For Obama's Huge Stimulus Plan

    The Senate finally passed its version of President Obama's near $1 trillion economic "stimulus" package. But as Americans saw that this so-called stimulus package is loaded with pork-barrel spending and does not include nearly enough in tax cuts and direct incentives, public support for it plummeted. The Republicans' alternative plans that proposed more in tax cuts were ignored (of course). I have numerous problems with the giant stimulus program, especially regarding the "protectionism" elements as you will see. Finally, earlier today Treasury Secretary Geithner announced a new plan to spend $2-$3 trillion to bail out banks, buy troubled assets, unfreeze the credit markets, etc., etc. I will have more to say about this as the details become available....
  • Obama Seeks Multi-Trillion Dollar Bailouts

    This week we start with a review of the latest economic data which indicate that the recession is still deepening. Following that, we will examine the $800+ billion stimulus plan that President Obama requested and the House passed last week. Unfortunately, apprx. two-thirds of that massive plan is pork-barrel spending that will not help the economy anytime soon or at all. Next, we will look at Obama's request for $1-$2 trillion to help the banking system. And finally, we will address the fact that the Fed is gearing up to directly purchase hundreds of billions of long-term Treasury bonds in case the massive bailouts don't work. It should be a lively letter!...