Today's Market
by Dr Invest

This morning I stared at my computer screen in disbelief as I saw the stock futures up over 100 points. Yesterday's market climb was due to the anticipation that the Federal Reserve must stimulate the economy because it is falling into a recession. This morning, European Central Bank President Mario Draghi pledged to do whatever was necessary to protect the euro zone from collapse, including fighting unreasonably high government borrowing costs.

The bold moves by government banks are designed to draw your investments into a faltering world economy. Explain to me how Draghi is goining to fight unreasonably high government borrowing cost? And what is "unreasonably high"? Are you ready to lend Greece or Spain your personal money? That is not likely when these countries are on the verge of bankruptcy and they are already talking about offering bond holders only half of the money they invested in government bonds. I don't think anyone is stupid enough to lend these countries money. Still, they continue to get money from bond holders and recent reports from Greece say that they have not met their promises to reduce government spending.

Although this idea "that people will stop buying bonds until the yeild increases" has been floated, it seems we are moving closer and closer to the collapse of bonds as governments fail to meet their financial obligations. Governments desperately need people to take their money out of their savings and lend it to them and they are immoral enough to manipulate markets so buying bonds seem desireable. Still, at some point, people will get smarter and see that the WIZARD OF OZ has no real power other than a loud speaker and a few special effects. (I'm talking about the government banks "bully pulpit" through the news media, to influence people by making promises that they cannot keep.)

Reuters Reported:

"Finally the markets have forced the ECB and the euro group leaders to begin to make statements that the market really wants to hear," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Hopes that the Federal Reserve will boost efforts to stimulate a flagging economy, maybe with a decision to do so as early as at its rate-setting meeting next week, soothed concerns about the economy and offset the impact of what investors describe as a "mixed" corporate earnings season.

Let me interpret for you: Government banks have made promises that if large investment firms will take people's money and lend it to failing and bankrupt governments, they will take the tax payer's money to prop up the failing government's loans so it appears that the economy is vibrant to the people.

Denying that there are any economic problems at all, government banks have created a circle of lies that put the "people's money" at risk. Obama care will tax the sale of real estate at 3.8% and raise capital gains to 28% and this on top of an already 20% income tax. It is a sad fact that a collapsing federal government must TAKE money from those who have worked the hardest and have been the most disciplined in their investments.

Conclusion

You will see stocks climb momentarily on the speculation that the FED and the ECB can and will do something to stimulate the economy. Even if they stimulate, most economist expect only a short lived effect on the market. As an investor, I can't control the government's taxing or stimulus, but I can control how I invest. Remain true to your investment plan and protect yourself from unforseen market downturns.

(note: The above article is for entertainment purposes only and not to be used as investment advice.)