"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey
For years, even as High School students, we were taught about the evils of communism. These lessons included how the news was manipulated to the scores of people in a communist nation. We were taught how the communists and evil dictators around the world controlled the hearts and minds of their citizens through their state run media.
No doubt, this is pretty evil stuff. Unfortunately, the same thing is happening the United States of America.
As an example, yesterday Fed Chairman Bernanke gave his testimony before the House Financial Services Committee. There was an extremely important exchange that took place between Mr. Bernanke, and Congressman Ron Paul.
Paul laid out very clearly the reasons for the crashing dollar, and why US consumers are paying out the nose for everything from food to energy. Instead of focusing on this issue, the media- I mean your media- didn't report this exchange at all. Instead, they reported that the Fed was ready to lower interest rates again to help the economy.
I can give you several more examples of how the media suppresses news, but we would spend week's discussing it. I'll just leave you with these comments from the Master of the Universe- David Rockefeller.
"We are grateful to the Washington Post, the New York Times, Time magazine, and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. ... It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during these years. But the world is now more sophisticated and prepared to march towards a world government which will never again know war but only peace and prosperity for the whole of humanity."
Today, the Labor Department reported that jobless claims rose 19,000 to 373,000. The 4th quarter GDP numbers came in at 0.6%, below expectations of 0.8%.
Yesterday, the dollar was down sharply as gold reached new highs.
The EIA released its inventory numbers for the week ending 2/22/08. Crude and gasoline had larger than expected builds in inventory. Despite these bearish reports on gas and oil, crude is trading up this morning to $100.09/bbl.
As I said yesterday, "the US dollar continues to fall to record lows, and traders continue to invest in commodities such as gold and energy as a hedge against inflation. As economic reports continue to reveal a weaker economy, the dollar falls in anticipation of lower interest rates."
Yesterday's rumor of allowing the Federal Housing Administration (FHA) to buy up to 1 million mortgages over five years to help prevent foreclosures was an important step towards preventing a huge market decline.
Unless we get a massive fiscal bailout of the banks and mortgage mess by the US Government, I believe the financial markets could possibly experience a decline similar to what we saw in the years 2000-2002.
This being said, I think it is vital that investors discipline themselves to invest slowly as the market hits various downside targets. An example would be;
% Declines from DJIA High of 14,198:
10%= DJIA 12,749
15%= DJIA 12,041
20%= DJIA 11,332
25%= DJIA 10,624
Investors who are patient and disciplined can make a fortune if they have cash to invest during periods of extreme market turmoil.
The January 2008 lows of 1,270-1,274 on the SPX may or may not be the bottom based on what step the Government takes to bailout the mortgage crisis. If no action is taken, the 1,270-1,274 may be a temporary bottom. Even during this period of weakness, we never saw the panic bottom that normally occurs to drive market sentiments to extreme bearish levels.
