Perspective

Now that healthcare has passed with the President's signature, time to stand back and take a more expansive perspective. There is no doubt that the time has arrived for this country to experience a change. The president and congress symbolize this by passing healthcare in the current form. The positive is that those who have been complacent and letting others rule their lives have been pushed to action. This is what allows democracy to be strong, having its citizens be active participants in the ruling process. As time passes, we will experience what is in this healthcare bill. There is no one person who understands the breadth and scope of its impact. As it unfolds, use the impact to scrutinize your own life to see if you are living in a way that best serves you, your family, your relatives, and this planet. Stand up for what is important to you and your life path. If you don't know what that is, use this legislation as a signpost to point the way.

Again, I commend Google for not participating in China's censoring of its people. I welcome those companies and people who put their integrity before money and profits when there is a conflict between the two.

A new wrinkle to the housing market which has yet to reach bottom is Bank of America taking the lead to reduce the principle amount of mortgages of struggling home owners up to 30 % of the principle of the mortgage. I am sure other banks will follow their lead. Watch the FDIC. They closed 7 banks last Friday; the highest weekly rate of closures this year. Momentum is under way.

China and the Long Term View

I decided to write the next blog when the market went up, and today was a big uptick.  It is surprising the Citi is being credit for this, along with the intention of reinstating the uptick rule when shorting stocks.  I think today's gain is still the bear working, since these fluctuations are normal.  

My main focus for this blog is China.  Several recent significant events have occurred:

*  Ms. Clinton's visit to China did not include any discussion of 'human rights.'  The focus was on money.

*  The Dalai Lama  has publicly said how his people have been through 'hell on earth' under Chinese rule.

*  China's military said that our Navy 'broke the law' when they circled our ship with theirs.

China has a surplus of cash as we continue to dig a deeper hole of debt.  They are becoming stronger financially through our actions of borrowing. I am concerned that we may be 'naive' in thinking that China will continue to act as in the past since we have been the major buyer of their products.  With both Congress and the President being of the same party, I am concerned there is no one standing back and looking beyond the immediate to see the potential of what lies on the horizon as a result of our indiscriminate spending.  Yes, the Republicans are speaking, yet I think they are basically ineffective in  promoting a conservative agenda.  When I look at the other major players (countries), they are all weakened from lower oil prices, their debt, and the continue fallout of the banks from bad loans.

Housing values are expected to continue to fall for the rest of this year, knocking another 20% or more.   This will keep the current bank challenge in the forefront.  We will reach the 'law of diminishing returns' and then the question is 'what's next?'

Transparency

I wrote to Senators Shelby, Feinstein, Boxer, and Herger to oppose bailing out the auto industry.  Here is the summary:  "As I wrote to you regarding the $700B bailout, I am writing to say  I am opposed to bailing out the auto industry.  This country is spending hundreds of billions in the short run and I don't see anyone looking at 'saving' something for future unknowns.  Also, why give money or loans to the automakers who have the same business structure and management that brought them to the financial situation they are in?  This country cannot afford to keep 'rescuing.'  We will get to a point where the U. S. cannot rescue themselves when the foreign investors finally say 'enough is enough' with buying our bonds and treasury bills.  The government needs to start showing its citizens how to 'save' money by setting the example.  We are on the wrong track and moving at lightening speed. To get off this track will be painful for most of us.  But the time is now.  I don't want to see our kids, grandkids, and those to follow bear this burden.  We need to resolve it now.  Thank you for listening."

Since I wrote the last email, looking for threads, I saw a few interesting ones.  First, over the next 18 months, banks are going to cancel lines of credit from credit cards to the tune of $2 trillion.  Second, money for mortgages are shrinking and the forecast is that it will push the price of homes down another 20%.  Contrast this with what our government is doing; flooding hundreds of billions into the banking system for the purpose of providing stability so money will be loaned to consumers.  As you can see this is a paradox, yet it is prudent on part of the banks to be conservative.  With the job losses mounting, it will be very important not to loan money to those who do not have the ability to repay.  I see our top leaders having no affect to the bottom line, regardless of how much money they print and distribute.  It is time to rein in our debt all the way through the system, from top to bottom.  This is already happening, yet isn't apparent because of the government's behavior with its ability to create money and how they are using it.  Now I think this market will drop well below 8000 and stay there until we as a world, not just a country, move in the direction of 'saving' along with spending.  This is a unique time in history and we happen to be alive to experience it.  This is an opportunity for great soul growth if you look at what is going to unfold as a needed correction for the benefit of the whole.

Here is  a quote from Thomas Jefferson in 1802:  "I believe that banking institutions are more dangerous to our liberties than standing armies.  If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."  

I look at this as prophecy that can be changed.  It is you and I, the individual, collectively working together to make sure that our government acts in a manner that serves all of us, regardless of how painful it may be for each of us individually.

One final thought to those who are invested or investing currently.  What seems like a good deal based on the past may not be a good deal based on the future.