Nine years is a long way to go before the U.S. will be out of the recession.

The talk of recovery by Obama and team is pie in the sky.  The recovery will not even begin until he and most of Congress have retired on their golden parachutes.

In the mean time, the real working people like you are I will need to struggle through a decade long recession.  In fact, there is a good chance that the world will look completely different in nine years and the U.S. dollar may not even remain the global reserve currency.

And I’m not saying that the economy will be recovered in nine years, I’m saying that the recession will be over and the nation will begin to recover.  I know that sounds like a long time and no one in power is going to say something like this because everyone want to hear that the economy will be recovering in the next few months. 

But that is simply BS.  The recession is already beginning a double-dip as the wave of stimulus winds down.  By the end of the year, Congress will be crying for more stimulus money and the Fed will be cranking up the printing press (by giving more money to banks and buying their assets for more than their market value). 

Then the economy may hold its own for six-months before beginning its triple-dip as this round of government stimulus winds downs.  By then Obama will be forced to start making federal government cuts, pointing fingers at Republicans to cut their programs like the military while he continues to expand the funding for his programs - like Obamacare, which is capable of bankrupting the nation by itself.

Obama’s will talk a lot about cutting spending as he prepares for his 2012 election bid, all the while passing bill after bill to increase taxes to pay for his massive programs. 

By 2012

By the end of Obama’s term, the economy will be worse than it is today, with 12% unemployment and a small-business sector devastated by increases in taxes and regulations and unable to hire.

The only hiring that will take place will be the government and even that hiring will be slow as many state government agencies will be forced to make bigger and bigger cuts. 

As a result of the poor economy, Obama will lose the Presidential bid for re-election in 2012 and the new Pres will have campaigned on restoring jobs as his number one priority. 

All the while, the community bank market will continue to erode as home prices continue to decline because of the massive number of homes that are bank owned due to foreclosure.  At the current rate of home sales, it will take 7-10 years to liquidate the bank owned homes.

With high unemployment, consumer spending will remain weak and that will keep these millions of homes from being sold. 

By 2016

The next President will make even bigger cuts to government spending, perhaps following some of the ideas at

http://www.downsizinggovernment.org/. 

The world leaders will have had enough of our reckless monetary policy and will begin demanding their money back.  Gold will be pushing three to four thousand dollars per ounce as world leaders discuss a replacement current to the dollar.  

The global financial community will put a lot of pressure of the President and will likely cause him to tighten even further then would like too, as the dollar comes under pressure from the bond market sell-off, the Fed will be raising interest rates and assuring the foreign nations that we will get our debts and spending under control.   

The new President will have an understanding of how the economy works and realize that jobs don’t come from government intervention or spending, but from the small-business sector.  The President will cut as many bad policies and taxes that he can in order to stimulate growth, knowing that the world is watching and the value of the dollar is in question. 

But higher interest rates will be very difficult because of the high level of U.S. debt.  The nation will be facing default or inflation, and will likely chose inflation.

Many of the taxes that the Obama team passed will be repealed, but some of them like Obamacare may linger on and become too hard to change, forcing small-businesses to pass the expenses on to the public.  So consumers will be facing higher prices due to inflation and government taxes like Obamacare and high unemployment. 

I don't think the stock market is likely a continue upward at this point or even before this point as the U.S. consumer becomes a dead horse, investors will be looking for other horses to bet on.

By 2020

By 2020, it will be a miracle if the dollar does not lose 50% or more of its value and its global reserve currency status.

The U.S. national debt will be well over 100% of GDP, but the economy will begin to see a drop in unemployment as the small-business sector finds it legs from the cuts in taxes and regulation.

The economy results will be clear to see, giving the President a very good chance of getting re-elected for a second term.

Failure of Liberalism

The decade long recession facing our nation was and continues to be a failure of liberalism – not the free market.  The liberal agenda that resulted in the reduction in lending standards and the expansion of Freddie Mac and Fannie Mea in the name of ‘inequality’ and ‘spread the wealth’ doctrine are pure socialism ideas that have a history of failing.  

Luck would have it, we elected one of the most liberal politicians as President at the beginning of the recession.  The liberal agenda of the ruling party today is on a tare; taxing, spending and regulating the nation deeper into the recession.

It will take another eight years to fix what they have done to our nation.  The November elections will be the beginning of the economic recovery.  The sooner we vote these bums out of office the sooner the economy can start creating jobs.

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Sound money comes from economic policy that promotes individual moral decisions. Economic policy is created by legislators that are elected by the people in which the culture plays the largest role.   

Good and moral leaders come from a culture of morality that rewards honesty and integrity.  Leaders are a reflection of the culture.

If the US is to remain a superpower we need to restore our moral heritage because that is the source of our economic policies, which result in sound money and our strength as a world leader.  Sound money means our dollar is worth its value, which is a result of high savings and production. 

Without a strong dollar our nation will not remain a superpower.  And our current political leadership is destroying the value of the dollar every day.

In exchange for the value of our currency, President Obama and team are trying to remain in power.  They are in effect destroying the nation from within.  

In their pursuit of power they are sacrificing the value of the dollar by borrowing and printing trillions of dollars to grow and maintain the government’s vast power.

Power is like freedom.  Without an understanding of how extremely rare and difficult is it to get, it cannot be properly defended and passed on to the next generation. 

We need new leadership in America that value our long-term financial credibility above temporary power grabs, so that our children have a nation to inherit.   

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Throughout his presidential campaign, then-candidate Barack Obama promised the American people: “If you’re a family that’s making $250,000 a year or less, you will see no increase in your taxes.

Yet sixteen days into his Presidency he signed a cigarette tax increase, which targeted families making under $250,000 a year.

During the presidential debates and the passage of the Health Care Reform Bill, Obama continued to claim that he was not going to tax ‘the little guy’.

Here is a video of Obama deigning that the health care mandate is a tax increase.

But now that Obamacare is facing major legal battles and is clearly unconstitutional, the White House is called the health care mandate a TAX.  Not only is this a clear flip-flop by the President but it is a direct contradiction to his campaign promise to not raise taxes on ‘the little guy’.

Clearly Obama does not have 'the little guy’ is mind with his job destroying agenda and as he continues to drive the economy into a deepening recession.

President Obama's disapproval rating is at 56%.  According to the rating experts, once a Presidents disapproval rating hits 60% they can no longer effectively govern. 

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Retirees and other residents from all over the country donated half a million dollars on Thursday to help defend Arizona’s immigration law against the federal government’s lawsuit filed on Tuesday.

In a fight for President Obama's re-election campaign to win the votes of immigrants, he is fighting against the jobs and protection of the American people.  Didn’t they used to call this treason?

In a Rasmussen poll today 67% says that illegal immigration is a significant strain on the US budget, as several states and the federal government are facing historic-level deficit spending.

Not surprising, in a Gallup poll today Obama’s disapproval rating increasing to another new high of 48%, a 6 percent increase in a month.

To top it off, President Obama and team are raising taxes in a number of new bills in a foolish attempt to continue funding the expanding government and to help pay for the governments legal battles against state’s illegal immigration laws.  Obama is funding his legal battle against the people by taking more money from the people.  

More then a dozen states are now considering the passage of a similar immigration law to Arizonas'.  President Obama has spent all of his political capital on the debacle of health care reform and his failed economic policies have taken away his credibility.

He is still talking but few are listening anymore – even within his party.  The Nov. elections are going to set a new record number of political leaders that lose their seats.

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I’m convinced that global markets are soon going to crash and they need to so that the global economy can begin to rebuild.

Hidden beneath trillions of stimulus, the real economy, the one that is based on real consumer demand will finally be allowed to show itself. 

1.       Force government to cut spending

When governments cut spending it will allow the market to start creating jobs when it no longer has to compete with the government. 

The market crash will finally allow capital and labor that has been mal-invested and miss-placed by decades of government intervention to be freed up for private businesses to use in pursuit of real economic growth by meeting consumer demands and creating wealth.

2.      Come clean

The market crash will expose the trillions of bad loans and asset values that are still hidden on the books of banks and financial institutions.  This will force central banks and investment firms to stop lying about the values of assets, many of which are worth close to zero.

3.      Stop the Federal Reserve

The Fed is perpetuating the financial crisis by holding interest rates at zero and flooding the market with new money.  The market crash will force them to stop their inflationary agenda that is destroying the dollar and its hope to remain the global reserve currency.

Savings are the foundation of economic growth, without saving you don’t have an economy.  The dropping savings rate in the US for the last decade is a direct result of government intervention to prop up the economy to gain power and get reelected.

The day is coming when interest rates will spike and saving money will once again be rewarded. 

The sooner we let the old business models fail and the sooner we begin to raise interest rates, the sooner the process of building new businesses can begin.

4.      Force the bums out of office

A market crash will help force the corrupt politicians out of office, but there is always the risk that we will elect new politicians that are even more corrupt.  We need to vote for character, not chrism or a well spoken communicator.  We need to look at the background check of each candidate and make sure they are not connected to radical extreme religious groups or a convicted corrupt political organization like ACORN.

5.      Save the economy

The economy is facing major challenges and the sooner we take real action to address those challenges the better.  

The more we continue in the tax and spend direction, the worse the economic disaster is going to be.  The global central bankers are starting to realize that the global economy cannot be supported by the tax and spend direction that Obama continues to pursue, and they are preparing to break from the leadership of the US in order to get off the path of inflation and avoid global hyperinflation.

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The temptation of inflation is so irresistible, yet once you take one step on the path of inflation, there is no easy way back to the path to economic stability.  

The US Fed has been creating new money since 1971, when the dollar was removed from the gold backing and became the global currency for trading oil.

The path of inflation does not go on forever. 

Sooner or later every nation must get off the path.  The exit is a dozy.

The only way to stay on the path is to continue creating larger and larger injections of new money, as the Fed has done for decades.

And the only way to get off the path is to remove the money that has been created and injected into the economy, which usually results in a new currency or a major deflation of the current currency.   

At the end of the path is a currency crisis, resulting in hyper-inflation, which we are now approaching.   

The Cause for the Crash

The reason that the economic correction cannot be avoided is because the market, which is made up of people like you and I, do not accept the bubble asset prices created by decades of new money nor do we accept the face value of the new money being created. 

The market, which is you and I, refuses to accept being robbed of the wealth that we have accumulated.  This is the driving force behind the market crash.

The Fed, Congress and the President are delusional to think that the nation can remain on the path of inflation indefinitely or even until their next election.

Yet, I don’t expect them to face the music anytime soon.  The time to get off the path of inflation with little damage has long past.  The nation has been on this path for 50 years and at this point the market correction would be extremely politically damaging.

They have no choice but to try to stop the market correction.  But it cannot be done, because the phony economy that they created has been exposed and the market (you and I and the rest of the world holding dollars) is now very aware that we were being robbed. 

Inflation is Robbery

It’s much harder to rob someone when they know you are robbing them, than to slowly rob them over several decades – as Congress and the Fed have done with inflation.

I fully expect the Fed, Congress and the President to try to keep the market (you and I) in the dark with another even bigger round of stimulus later this year in order to try to keep their jobs.   

Compounding the Correction

They are only compounding the problem and delaying an even bigger correction.  The marketplace can only be fooled for so long and sooner or later it will refuse to accept any more new money. 

One of the best solutions throughout history to exit the path of inflation has been to stop using government issued money and move into precious metals that no government can control the supply of. 

This is in effect rejecting the face value of the new money being issued by the central bank.  The increasing price of gold is proof that many are refusing to accept the loss of their wealth. 

This is a clear indication that the world is not going to accept the new money at face value anymore and this could soon become a major threat to the issuing central bank of the dollar - the Fed.

If the Fed cannot continue to fool the majority of dollar holders, they will have no choice but to stop issuing new money and let the economic correction take place.  This is a very unpopular and politically damaging decision, and therefore unlikely.

This is why even in the face of world leaders holding trillions of dollars the Fed, Congress and the President are likely to continue to print money until their last breath.

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Government welfare spending, like most government spending, is on an unsustainable path.   

What do we have to show for decades of government welfare spending? - more and more poverty.  Here is a quick video highlighting the results.

The reason that government spending on welfare does not work is because the government has little interest is actually helping people - they don't care.  They are mostly interested in getting re-elected.  The public understands this and it quickly becomes a game of buying votes and emotional storied to push for more welfare programs that only perpetuate the problem.

The one and only solution to poverty is hard work, saving and a community or family that gives a shit. 

When you lose your job and you family helps you out, you realize that they are making sacrifices to help you because they actually care.  This creates motivation for you to get a job as soon as you can and perhaps help someone else in your family when they need help. 

Government programs disconnect the person getting the money from the person that is sacrificing to give you the money.  The money that is given to people has no personal connection because it is socialized on the public through higher taxes and an ever increase in the national debt.  

If you know the person that you are helping, you both gain from the relationship that forces you to trust and respect each other.  This character that is learned during a time of economy downturn becomes the foundation of the financial education of the next generation and the motivation for entrepreneurs to take their turn and become productive.

Likewise, business enterprise cannot exist without providing products that people actually need at a price they can afford to pay.   If government welfare programs were not involved in driving up prices and limiting supplies, businesses would be forced to produce the things that customer need at whatever prices they could afford.

Left alone, business enterprise is the best source of community welfare.  Business enterprise is the only true source of real jobs and goods. 

It is government regulations and taxes and economic policy that distort the market that results in an increase in poverty and the loss of motivation to dare to dream of becoming a world class entrepreneur, creating wealth and increasing the standard of living for everyone involved.

Family and business will always be a better source of welfare then the government.

When are we going to stop our foolish ways and cut the government out of the racket they are in?  

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This is a very important question and the answer will determine which investment strategy is correct to navigate the deepening recession.

For the last two years, central banks all around the world have been pouring new money into their economies to try and slow the global recession.

But when the Greek bond market started to crash a few months ago, that changed everything.  Since then, austerity measures have been springing up all over the globe.

Culminating at the G-20 meeting last week, central banks are united in their idea that the time to flood the market with money has past and now is the time to cut spending to avert a debt crisis that could be much worse than facing the global recession.

They are in agreement that the cure (creating new money) is worse than the disease (global recession).

But what they are actually admitting is that the cure is the disease and the disease in the cure. 

Creating new money is the disease that has been growing for decades and the cure is the recession that they have been avoiding for decades.

And there is no plan B.

There is no other way to cure the disease other then stop feeding it.   Governments and central banks around the world are deeply committed to Keynesian economics—which is the crazy idea that prosperity can be produced by an increase in spending.

Keynesian economics has never led a single nation to prosperity, only bankruptcy and hyperinflation.

The Greece crisis has opened the eyes of central bankers who have suddenly realized they are on the path to complete economic collapse and that no-one is going to bail them out. 

EU and Asia Market Crash

With that in mind, the markets, which have been propped up by stimulus money, are going to be forced to adjust to the reality of the recession.   Without new money pouring in, the free market (which is you and me) will continue the process of destroying the value of phony asset prices. 

And after the markets sink, central banks will still have the trillions of debts that they created over the last few years. 

US Market Crash

Even if the US central banks continue to print money against the better judgement of rest of the central banks of the world, the equity markets will not be able to act independently, because they are highly coupled together and will all sink together.  

And because the Asia and European central banks are not going to match the money being created by the US central bank (the Federal Reserve), the US central bank will be forced to also stop creating money or risk a major drop in the value of the dollar.

Deflation

The result should be deflation or dropping prices in consumer goods (cars, houses), energy (oil) and commodities (gold, silver), equity markets and bonds. 

But during the crash, where are investors going to move their money to in order to avoid the drop in assets—perhaps gold or bonds? Then after the crash, where is the liquid money going to move too?  Gold is the most likely place.

What about the trillions that the US central bank has added to the economy over the last two years?  Dispite what they claim, I don't think it is possible for them to extract that money and therefore it will continue to push prices up—which is the results of inflation.

So we are going to see prices going up and down, depending on shifting consumer demands.

Hyper-inflation

If central banks begin moving their savings into other assets like gold and oil rather than US bonds, the rate of inflation in the US will be multiplied.

This could force the US central bank to quickly reverse course and instead of creating money, retract money from the economy—even as the unemployment rate is climbing, to avoid hyperinflation.

In summary, the global economic picture is about to take a drastic different direction because the central bankers are no longer in support of creating or borrowing more money. 

The answer to the question, "Can central banks create new money faster than the markets can destroy value?" is NO.

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The G-20 meeting resulted in a rare occasion with almost all of the national leaders suggesting the same strategy for the global economy.

The strategy is to STOP government borrowing and spending and let the people rebuild the economy without government intervention.

Only one leader had a different strategy, President Obama, which was to threaten the rest of the leaders into continuing to print and spend money until the global economy is clearly out of the recession.

The lack of influence of Obama’s economic policies with world leaders seem to mirror his sinking influence at home as the polls continue to show his approval rate dropping.

California on 'Verge of System Failure'

From Obama's side of the fence, California is about to suffer a complete economic meltdown. Obama has a Greece debt problem times ten—as California is on the verge of system failure.

According to an article at NewMaxx,

“California’s fiscal hole reportedly is now so large that the state would have to free 168,000 prison inmates and permanently close 240 university and community college campuses to balance its budget in the fiscal year that begins July 1.”

“We are on the verge of system failure,” Jean Ross, executive director of the California Budget Project, told the Globe and Mail. “We have to get some federal money,” Ross says. “It would be bad for the U.S. and, arguably, bad for the world to do the shock-therapy approach.”

Budget analysts say Governor Arnold Schwarzenegger has no choice but to ask Washington for bailout funds, and that Washington has no choice but to agree because not bailing out the Golden State could put the entire U.S. economy at risk. It seems that California — which at one time had the third-largest economy in the world — is like the biggest U.S. banks: Too big to fail.”

Obama needs to print a lot of money to bailout California and keep the US economy from collapsing, but he cannot do that unless he can convince world leaders to follow suit and continue printing money so that their nations will continue accepting the value of the dollar as is. 

Without foreign nations printing money as fast as the US, the dollar will sink and the US economy will be force to face massive inflation on top of its troubles.   The inflation (reflected in higher prices) will then force the US to stop printing and borrowing money as interest rates rise.

There will be a lot of difficult decisions in the next six months and the direction of the economy is at stake. Taken together, state budgets are $112 billion over.  If Obama gives federal money to California, every state will want be bailed out.  Who will get the money and how will it be fair?

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Coral Ridge Ministries has created a new documentary called “Socialism: A Clear and Present Danger.”

The film questions “whether socialism is the Bible’s prescription for the underprivileged and assesses socialism’s track record in Venezuela, Cuba and elsewhere.”

The film’s creators build the case against socialism and conclude that socialism only leads to poverty and dealth. 

The film combines clips from speeches by President Obama and interviews by individuals like MN Rep. Michele Bachmann with images of the Communist Manifesto and of figures like Stalin, Castro, Mao and Hugo Chavez.

It shows how the envy-inflamed ideas of Marx and others are at war with the family, the church, and with God and His Word. Though some Christians claim that the Bible teaches socialism, both the DVD and the book provide biblical evidence to the contrary.

The expert guests in the firm discuss the history of socialism and how is leads only to persecution, starvation and murder—like under Mao in which 80 million people perished.

Jay Richards, Author of Money, Greed, and God: How Capitalism Is the Solution, Not The Problem, says

"The fruits of socialism couldn't be worse. In fact, there's no political ideology that's ever killed more people than the socialist experiment. And so, from a Christian perspective, just from a generically moral perspective, the idea that socialism ought to have some kind of promise for redeeming human beings or helping us, it's absurd. Just look at the record."

Click here to watch the preview

This is an interesting documentary, but the question I have is why Obama and the Left are so committed to an ideology that is proven to lead to financial slavery and death?  How could the leadership of our nation get so confused about an idea that they are will to put the US on the path of destruction?

The good news is that Obama's agenda is so radical that he is unable to hide his convictions, which has clearly exposed the dangers of the path we are on and this video is a clear demonstration of the response of the people to save the nation before it’s too late.

The reason that the Left has been able to lead the nation this far down the path of destruction is because the identity of Christianity has been stolen.  The politicians like Obama claim they are Christians, to get the support of the public, while they are actually against the very absolute values and laws of God that the governance of our nation depends upon.

Obama is not a follower of Jesus Christ as shown by his agenda and his speeches.  But then what is he?

Jesus addressed the issue of neutrality when He told His disciples in Matthew 12:30:

“He who is not for Me is against me, and he who does not gather with Me scatters abroad.”

By Jesus’ own words, if Obama is not for Jesus Christ then he is against Him.  This is the root cause of why the Left and Obama have embraced socialism.  Socialism is the logical conclusion to the rejection of God and the Christian moral absolutes. 

Not only do we need a fiscal conservative President to replace Obama, we need a Christian President—because Christianity is the cornerstone of our culture and economy, which is the cornerstone of the global economy.

And this is the subject of the next eBook that I’m currently working on.

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