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Food Stamps: From Freedom To Slavery

August 23, 2011 By

Food stamps or should we say “ObamaStamps”, are continuing to rise at an alarming rate.  Reuters just released an article claiming that 15% of Americans are now on food stamps.  This translates to about 46 million Americans, which is up over 12% from last year.  Food Stamps have increased about 74% since the financial crisis that began in 2007.

Food stamps are becoming the new normal for the US as the number of Americans without jobs remains too high and food prices continue to rise across the country.  This formula will continue to increase the usage of food stamps.  This has been the change that Obama has promised and he has delivered on that promise.  This is exactly the outcome he was hoping for, and that’s why he can take vacations while Americans continue to suffer from his policies.  Obama wants America to become a Socialist country.  He wants Americans to live in slavery to the government so that he can have his so called “eutopian” society.  The reality is that this type of society only creates slavery.  This is ObamaCare.

The food stamp entitlement program is killing the economy because more and more Americans would rather get free ObamaStamps than work.  That free money comes from the taxpayers which is reducing the amount of spending power consumers have in the US.  Also as a result of Americans having less money to spend, they also realize that Obama will have to raise taxes to maintain the spending and entitlement programs that he loves so much.  This is causing Americans to slow down their spending because they are unsure about tomorrow.  Businesses are also unsure about the future and can’t make investment decisions because of uncertainty knowing that Obama’s circus show isn’t sustainable.

This depressing reality is becoming more and more true everyday.  Many people are willing to gladly trade their freedom for slavery in what seems to be free money, goods, and services.  This is the ”change” that Obama promised.  It seems unthinkable as people around the world are dying for freedom as they live in slavery without the promised free money.  The truth is that the free money, goods, and services will end soon because it is not sustainable, and Americans will eventually be enslaved to their government.  Obama’s policies appear to be good and helpful to the people, but it results in slavery as the people become dependent and can’t provide for themselves.  It shouldn’t be an issue that those who want reduction in entitlement spending are not caring and selfish.  It is rather an issue of sustainability and freedom.  For example parents raise their children to one day become independent and live on their own, but the government is doing the opposite.  Obama is training the people to be dependent and apathetic.

This is all a matter of the ”takers” and the “makers”.  Once the takers outnumber the makers this country will collapse without a revolution.  The takers will always vote for more handouts because they have no choice.  So the makers will need to make the choice of freedom or slavery before the decision is already made for them.

Statistics of food stamps can be found here, and food stamp statistics by state can be found here.

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Germany and France have proposed a joint government.

August 17, 2011 By

Germany and France have proposed a joint government lead by EU president. This in efforts to save the Euro from collapse.

More from Daniel Hannan here.

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Five Year Comparison of the S&P and EURUSD

August 11, 2011 By

2007-2009 Recession

 

  • S&P started its fall on 10.19.2007.
  • EURUSD started its fall on 7.12.2008

-The S&P index was the first to fall about 10 months before we saw EURUSD weakness (USD strength) in its fall.

-EURUSD actually strengthened while the S&P began its move lower.

  • S&P bear market was between 10.19.2007 and 3.6.2009
  • EURUSD bear market was between 7.12.2008 and 6.5.2010

-The S&P bear market lasted about 17 months and the EURUSD bear market lasted about 23 months.

-The S&P bear market ended about 17 months ahead of the EURUSD bear market.

-The EURUSD rallied before the last 200 point drop in the S&P which was that last 1/4 of its total bear market drop.

-The EURUSD fell once more after the S&P made half of its 2009-2011 rally.

-EURUSD largest fall was about 3200 pips.

-S&P largest fall was about 870 points.

  • The S&P has started its new bear market at a high that was 200 points below the start of the last recession high.
  • The EURUSD is still about 1600 pips below its 2008 high.  If the correlations stay proportionate, we should expect a move higher in EURUSD to about 1.5131 before it begins its fall.  Perhaps this will begin in mid 2012.

Other articles you may be interested in:

Gold vs S&P500

$SPX Weekly candle chart

EURUSD Weekly candle chart

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Gold Margin Requirements Raised 22.2%

August 10, 2011 By

In order to stem the bleeding from equities and keep the ponzi scheme going the CME group has raised margin requirements for gold trading. CME raised requirements by 22.2%. Margin requirements will now be $5,500 per contract instead of $4,400. Gold has climbed as equities fall hitting a high over $1800 an ounce. Market Overflow expects gold to hit $2000 an ounce in the short term.

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Gold vs S&P500

August 8, 2011 By

They say a picture is worth a thousand words I guess this article is worth over two thousand, just like gold will be soon. Here is two charts showing Gold and the S&P 500 over 10 years. Dont believe the hype!

S&P 500 1 Month Ten Years

Gold 1 Month Ten Years

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Intermarket Update

August 7, 2011 By

We have maintained that equity markets are going to be moved by currencies particularly, USDX and the EURUSD, and not earnings this summer. We have seen the havoc that the debt limits increase and subsequent down grading of the U.S. creditworthiness to AA++ has had on equities. An interesting correlation may be forming between the USDX and equities. During the last year the Federal Reserve’s actions have put downward pressure on the USDX that has pushed the stock market higher. However, we may see both the USDX and the stock market move downward together. Investors may no longer see the USDX as the safe haven bet rather turning to gold, bonds and other sound currencies like the Swiss franc. This is not good news for the United States. We may see a pull back in equities but the trend is definitely down moving into the end of the year and there is a high probability that the USDX will touch the 2008 lows of 71.05. The economic slowdown will probably continue to push oil prices down with the expectation of lower demand by U.S. consumers. Going into the rest of the year gold and silver will continue their upward climb as investors look for a safe place to put their money.

Politically things could start to get more heated as pressure from constituents will cause eagerness by leaders to find someone else to blame for the economic troubles. The U.S. creditworthiness downgrade will give leverage to foreign debtors to demand higher returns on the investments when buying up U.S. debt. This will snowball the problem of our massive debt problem that has already reached 100% of GDP. Eventually austerity and higher taxes will come to the United States just as they have in countries like Greece. This may cause political unrest and a more polarized electorate as they see different causes and solutions to the economic woes. Stay tuned for more updates as the bailout bubble bursts.

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The Real Issue with the U.S. Credit Rating Downgrade by the S&P

August 7, 2011 By

The S&P downgrade of the U.S. Credit Rating will move the markets in the aftermath of the news for some time to come.  It will become the perfect playground for traders as volatility will continue to increase as fear spreads throughout the markets.  However, the downgrade should not be much of a surprise at all.  Many of the rating agencies have telegraphed this for quite a while now and have warned lawmakers in D.C. that something has to be done about the increasing debt problem. 

The debt ceiling limit became an opportunity for Congress to deal with the issue directly, but what came of it was more of the same.  After weeks of debate and politics as usual, the debt ceiling limit was increased, and just like that there is more credit on the credit card for the U.S.  Usually the S&P is slow to downgrade, and they were this time as well, but they had to follow through with their warnings to the U.S.  There should be no confusion over the reason of the downgrade.  Congress had a clear opportunity to take care of business by reducing spending, but that was not the result of the debt ceiling resolution.  Once again they decided to play politics and did more of the same.  So after the debt ceiling limit increase, how did the markets react?  They responded with a major selloff that erased an entire year of gains in a matter of about a week.  The S&P downgraded the U.S. because they had to.  They were committed to it after all of the warnings that they made public.  The S&P rating agency just confirmed what the market revealed a week in advance. 

Here is the irony:  The expectation set by the mainstream media was that if we didn’t raise the debt then we would get downgraded.  That was said to cause all of life for Americans to fall apart with no Social Security checks, higher interest rates on loans, a stock market collapse, etc…..   After all of the fear was created and fingers were pointed, Congress did what the media wanted them to do and what everyone knew they were going to do anyways.  They raised the debt limit with no spending cuts and as a result we were downgraded.  But Geithner said that there was no chance that the U.S. would be downgraded.  Well it shouldn’t be too big of a surprise that he did not know what he was talking about.

So what now?  Well the S&P probably did the U.S. a favor by announcing the downgrade last Friday after the markets were closed for the weekend.  That provided two days for the markets to evaluate the news before the next moves were made.  The economic laws of the markets are more powerful than the rating agencies.   Although the major news outlets will blame the fall in stock prices the value of the dollar that is coming on the credit rating downgrade, the real problem is that the U.S. government is devaluing the dollar and creating an environment that is difficult for the private sector to thrive.  These facts alone are the reason why the markets are responding with a negative outlook on equities and the dollar.  The government failed to restore certainty and confidence for businesses.  The signal from Congress was that taxes will probably increase to cover more government spending.  Those policies will produce a bigger burden on businesses to succeed.  Also when a country depreciates their currency, interest rates are destined to go up.  This will make it difficult for Americans and businesses to spend money and invest for the future.  Although Obama and the major media outlets wanted Americans to know that we had to raise the debt ceiling so that we would avoid a downgrade as a huge mistake.  Congress actually made a bigger mistake by failing to resolve the real problem of out of control spending.  They had to make spending cuts, and they did not.  We are locked in this mess of an uncontrollable debt until we have real sustainable reform.  Big decisions have to be made and they need to be made soon.  Geithner should step down and America needs new leadership.  We need those that are willing to make critical decisions by taking a stand against those that want to destroy America with a socialist agenda.  We need policies that will create confidence for the private sector.  And once again we need a strong competitive currency that allows Americans to reap the rewards of their hard labor, so that we can return to being a strong economic force in the world.

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Congress and Compromise

July 28, 2011 By

Lately there has been a lot of chatter about “compromise” regarding the debt ceiling debate in Congress.  There have been strong demands to “compromise” from our President on down to our neighbors.  It seems that the main stream media outlets have kept the focus on the AAA bond rating and the blame on party politics.  These issues have become the face of the whole debate in Washington and around the country.  The urge for “compromise” is aimed at raising the debt ceiling and for Congress to keep spending.  It is understood that a downgrade of the US credit rating would have catastrophic consequences to the future of the borrowing ability of the US government, which would have negative effects on the average American.  This would especially apply to those that have not been responsible with their finances and live beyond their means because borrowing costs would increase.  This scenario is starting to sound a lot like the US government and the American peoples’ addiction to spending and free handouts.

So we have the media that is coming down hard on the lack of “compromise” of the Republicans to raise the debt ceiling.  In all seriousness it seems that it’s not all about politics and the AAA credit rating, but rather what is really going on is that the majority of Americans are finally taking a stand for what they really believe.  That is namely taking responsibility for the “major” problem of spending.  We understand that we simply can’t go on spending like we have been for so long.  Americans aren’t as concerned about “compromise” like the media wants to make it out to be, but rather we are saying “enough is enough”.  The few are tired of paying for the many.  Congress is not the only guilty party in terms of our huge national debt.  Americans are also guilty as a whole, because we have let these terrible circumstances occur by the way we live uncontrollably with our own finances and demands that we place on our government. 

The reality in all of this is that we are already insolvent.  We can’t pay our bills because we need an increase in our national debt ceiling so we can pay our bills.  We shouldn’t have a AAA rating right now.  If we deserve the AAA rating it is only because the world is graded on a curve and our credit seems ok relative to the rest of the nations.  This attitude of, “since a lot of nations are in debt trouble then it’s ok to keep up our bad habits with the debt,” should be reflective of where our society is and how far it has fallen from morality.   Now is the time to recognize that we should have dealt with this a long time ago, but we didn’t.  Now we are faced with a debt crisis, and it will only get worse by not dealing with it now.  So the time is now.  If there is compromise it should come in the form of more spending cuts.  This means responsibility.  This also means short term pain for the long term gain.  Yeah the stock market might react negatively to spending cuts, but it will be for the good of the Nation and the people in the future.  This nation has always been a courageous nation that seems to always bounce back with a “never quit” attitude.  We are starting to see that now and the people are rallying.  This looks like the US Women’s soccer team’s comeback win over Brazil in the World Cup.  Fans around the nation were buzzing over the last minute heroics for what became one of the biggest wins in the nation’s history.  This is our time as a nation to reevaluate and be courageous.  It may not be popular with a lot of people, but it’s about responsibility and wanting a greater future for everyone.  It seems time for Washington to step out of the way and let Americans take responsibility for their own lives so that we can work hard to return our nation back to what made it so great.

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Harry Reid’s plan. Smoke and Mirrors

July 25, 2011 By

Harry Reid’s joke of a budget proposal is truly smoke and mirrors at best. We all expected the budget proposals from both Democrats and Republicans to be full of incredibly inaccurate projections of savings over the next 10 to 20 years. However Harry Reid is taking it to the next level. Not only are the projections over extremely long time lines, he is actually factoring in savings on spending that will never occur and has not even been requested by the President or Congress. $1 trillion of his $2.7 trillion dollar spending comes from projected surge time costs of funding the war in Afghanistan and Iraq. This savings is credited in spite of Obama’s plans to reduce troops over the next several years in both conflicts. Simply put, Harry Reid is cutting spending that was never requested. The fact of the matter is these numbers are nothing more than talking points for politicians. All savings are based upon a gamete of baseline projections from your pick of estimates that suite the particular politicians needs. In other words you can pick and choose some arbitrary estimate of how much some project is going cost, and then reduce that and claim savings. In the end we all know government programs always cost more than projected. Harry knows it as well, but he has to put on a show to look like he is working hard for the American people and that he is not part of the actual problem.

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Intermarket Update

July 21, 2011 By

One of the things Market Overflow tries to provide is the big picture. In other words how do markets interact, how do currencies and commodities interact with equities and vice versa. Finally how do these markets relate to the geo political climates both in the United States and internationally?

We have maintained that equity markets are going to be moved by currencies particularly, USDX and the EURUSD, and not earnings this summer. EURUSD strength and a weak USD will continue to drive up equities, as long as the political climate does not get too intense here in the United States. Given this premise the pressing question remains why EURUSD strength given all of the instability coming out Europe? The answer is simple, China has deep pockets.  China has heavily invested itself in both the USD and the EURO and the fact is, the European Union is more fragile than the United States, and China knows it! Not only does China know it but so does the IMF, European central banks and the Federal Reserve.  These forces combined want to keep the EURO alive and prevent the house of cards from taking down the international banking system. There are a number of reasons United States stability is much more attainable.  First off, we have a common language (although this is rapidly changing) and we have a common culture (or should I say pop-culture). We also have a stronger centralized government and monetary policy that has the ability to devalue our currency with more ease than the Europeans.

We have addressed the relationship between currencies and equities but what about commodities. The short answer is they are up long term! With currency devaluation, political uncertainty, lack of trust for the markets they are the new safe haven bet, not the USD. The main questions are when to get in and how long should you look to hold. If I have a long term outlook get in now. Short term we have had a tremendous move up in both Gold and Oil for example. If we get a resolution in the debt limit we may see a small retracement in commodities as people try to ride up US equities.

Finally, politically there is a lot of fear out there. The European house of cards is close to falling. Jumping from the USD into the EURO long term is like jumping from the Titanic to the Lusitania. Long term things don’t look good; we had the tech bubble, the housing bubble and now get ready for the stimulus bubble. When this one bursts those who are not prepared are going to be in a lot of hurt. The question really is when, and watching the political and market movements are going to be absolutely critical. Check back for more updates!

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