Earlier today, the Treasury auctioned off yet another chunk of American debt. This time it offered seven-year bonds to the tune of $32 billion. In all, the nation will go in hock for yet another $118 billion this week.

It may sound like a lot, but it’s just another busy week of financing Washington for Geithner and his crew.

While so many of us in the financial punditry business are worried about a lack of foreign borrowers, it is far from the case today. Yesterday’s $42 billion five-year auction came with a bid-to-cover ratio of 2.81 (alarmingly high) and today’s auction boasted a ratio of 2.76, proving there are still plenty of buyers willing to “enable” Uncle Sam’s spending addiction.

If you are a bullish investor, this is not good news.

Let me repeat… this is not good news!

Here’s the deal, plain and simple. When hundreds of billions of dollars are flowing to Washington, they are not flowing to Wall Street. When Geithner passes his hat, there is that much less money to boost up share prices.

Fine, you say. I invested in gold. With low interest rates and a weak dollar, my gold position will soar.

Wrong!

Why are most gold speculators buying? Because they think countries like China and India are dumping the dollar and pouring into gold.

Well, according to the folks that walked out of the Treasury empty handed this afternoon, their precious metal buying may be less robust than many thought. That certainly is not good news for gold bugs. Gold is a purely speculative bet right now.

If you own any, sell it.

I know that is a sore subject with many readers, so we’ll deal with the topic on Friday.

Just about the only thing Washington’s ever-increasing debt is good for is propping up the housing market. As mortgage rates drop to all-time lows once again (thanks to dwindling bond yields), potential buyers still have a significant incentive on their side.

While Uncle Sam may stash $6,500 in a buyer’s pocket, a 30-year fixed rate of 4.99% will ultimately put much, much more cash in their accounts.

A young friend asked me this morning, “I’ve got sixty grand in a savings account. Should I max out my IRA or buy a house?”
Buy the house!

The markets are setting a trap. And it’s a darn good one. Most investors have no clue it’s there. But if you pay attention, the trip wire is obvious. We’ve got stagnant, if not falling, interest rates, soaring national debt, all the workings of a gold bubble and, guess what, your taxes are going up.

If you think the Dow will hit 14,000 anytime soon, you had better think again. Somebody is about to hit the reset button and it’s not Hillary.

*** Before I go any further, let me tell you that my wife has one of those cushy union jobs. She pays about half a nickel in monthly insurance premiums, she gets a raise in January and her job is as secure as it gets these days.

With that off my chest, let me tell you this.

I hate unions!

They are the reason I have to call India to fix my laptop and why I drive past empty factor after empty factor on my 55-mile commute to work.

But like anything well played, even a union can make a savvy investor money.

Here’s a bit of what I wrote for the TFN site this morning:

“For Harley Davidson, unions have been an unreachable thorn in its side. The problems are almost mirror images of the woes in Detroit: not enough flexibility, high wages, top-notch benefits and a constant threat of a strike.

“This economic downturn is just what the motorcycle maker was prayer for. It gave the company all the leverage to say shut up or get out. More specifically, Harley told the union shut up or we’ll get out.

“The company’s largest manufacturing facility is located in York, Pennsylvania. The union’s current labor contract is set to expire early next year. Knowing the company had a major battle brewing, executives went proactive.

“They started a search for a replacement factory, one with better technology and, more importantly, a cheaper workforce.

“It’s basically a reverse strike. Sign the contract or the factory walks.

“While nothing has been signed just yet, there is a very good chance York’s union will vote in favor of ratification on December 2. When it does, Harley shareholders will be in a good spot.

“I got a peak at the contract last week. It gives the company just what it needs… flexibility.

“While pay is an issue, Harley has no problem paying top dollar if it means high-quality workers. But Harley can’t afford to pay some gray-bearded grump to sit in the break room. That’s why the new contract cuts the labor groups to a mere fraction of previous levels.

“No longer can a worker claim, “I’m a welder. I don’t touch a wrench.” Now, if he’s working, he’s doing what the boss says. It will allow Harley to cut the factory’s headcount nearly in half, saving massive annual labor expenses.

“The new contract also calls for Harley to put about $90 million into modernizing the current facility. While it will be an added line on the expense sheet, you can bet executives are counting on a quick payback.

“I wish I could claim to be the only investor watching the action unfold, but I’m not. Over the last few days, shares of Harley have climbed steadily, sending shares to new 52-week highs.

“Over at TFN Strategic Trader, we took full advantage of the action. Last Friday, we entered a set of the company’s December call options. And yesterday, we sold them for quick-and-easy gains of 60%.

“For once, I have a reason to be thankful for unions. They made us money.”

Can’t complain about that. Keep reading here.

*** Before I go, let me remind you to take time to give thanks for what you’ve got. It’s more important to count our blessing now than ever before. We may not have them tomorrow.

Here’s just a glimpse of what I’m thankful for…

A lovely wife, a baby on the way, a roof over my head, a freezer stuffed with food, friends that would kill their prized pig for me, a steady job, family, the freedom to say I don’t like our government, anything with peanut butter in it and of course, a loyal group of readers that are not afraid to let me know their thoughts.

But there are currencies that have actually been falling against the green back. My guest today is Sovereign Society’s currency expert and editor of the Money Trader, Jack Crooks.

The dollar has plummeted in Europe and Japan. But it has actually gone up in many countries, such as South Africa, Indonesia, Iceland, South Korea, Argentina. What is the reason for the decline in these currencies?

Jack Crooks: You’d think by reading the news that the dollar has fallen against everybody, but the lowly green back has appreciated against some of those countries. The reasons vary. Iceland is a financial crisis and I think South Africa has a political problem. So you have different reasons for these falls against the dollar in these countries. And you have to get beneath the surface to see.

It goes to show that currencies aren’t always a one-way bets. No matter how bad a currency may look, it may be appreciating against something else.

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American Debt Crisis Set to Implode

Ben Bernanke is just DAYS away from unwinding the world’s biggest bet – and his actions could spin markets into a “deflationary, global collapse.” To learn his dirty little secret – and grab potential gains of 319% or MORE, read Jack Crooks’ latest report.
___________________________________________________________

Laura Cadden: I was especially surprised to see the South African rand dropping 26 percent against the dollar in two years. Yet they’re one of the major gold producers of the world. How do you explain this situation?

Jack Crooks: That’s an odd one, especially if you look at the price of gold, as you said. It almost runs completely inverse to the dollar. If gold goes up, the dollar goes down. So you sure would expect the South African rand to go up as. But I think that’s a real political problem there:

The South African government really is shifting more from capitalism to a very socialist economy. They’re having power outages and you’re just seeing a real breakdown in a lot of the key factors that drive an economy. The political side is scaring a lot of investors out of South Africa. And since currencies are driven by money flow, if money is moving out of South Africa, its currency is going to fall.

Laura Cadden: Let’s talk about Iceland. The krona has slumped 26 percent against the Euro this year and it’s down 40 percent since mid-July 2007. What do you think is the big factor there?

Jack Crooks: Now Iceland is a financial fix. There’s a real banking crisis going on in Iceland because Icelandic banks borrowed a lot of international money from Norway, Denmark, Sweden, the European market.

Then we had the credit crunch. Then all of a sudden they couldn’t get the funds to refinance these credit lines. It fed directly into the currency.

There’s no free lunch: A lot of small investors were putting a lot of money in the Icelandic currency because the interest rate was so high. They thought they could earn ten, 15 percent in Iceland interest rates versus three percent in the United States.

There was a reason interest rates were so high in Iceland: Because there was a lot of risk. The currency fell off the table because of that risk when it came to fruition.

Laura Cadden: Iceland hiked their rates up to 15.5% in part because they were battling inflation of 11.8 percent. Can you imagine yields of inflation like this to a U.S. investor. I mean that’s just crazy.

Do you think it’s going to continue? The krona’s going to continue to decline?

Jack Crooks: Well, recently the banks of Norway and Sweden have come in to try and open up credit lines and really save the currency to a degree. This is a real emergency for Iceland.

As you said, it’s really a double whammy. It’s not only financial, but you have that inflation problem in the background. You also have the situation where their economy is starting to slow down. It’s bad news at the moment. So we really need to see how this shakes out because if we have another bout of the credit crunch globally, it’ll continue to feed into Iceland and I think will continue to hurt the currency.

Once we get through this credit problem and if the banking system is stabilized in Iceland I do think it’s going to be a great buy.

Laura Cadden: So are there any opportunities for U.S. investors to leverage this situation for long-term gains?

Jack Crooks: As I said, I think Iceland is going to turn around because the economy ultimately is stable. They just got over-extended on this credit crisis. So I think that would be a nice long-term play, but we want to see some consolidation technically there.

In other places there are a lot of emerging opportunities. Emerging markets all present opportunities—big risk, but the reward is there if you’re willing to take it.

Source: Currency Trading Strategies for a Volatile Forex Market

It was Dr. Goebbels who observed: “Propaganda has only one object; to conquer the masses. Every means that furthers this aim is good; every means that hinders it is bad.”

Fear was the Nazi stock in trade. They used fear as a potent psychological weapon in their efforts to direct and control the German masses.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

American Debt Crisis Set to Implode

Ben Bernanke is just DAYS away from unwinding the world’s biggest bet -

and his actions could spin markets into a “deflationary, global collapse.”

To learn his dirty little secret – and grab potential gains of 319% or MORE,

read Jack Crooks’ latest report.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

And each year, as dependable as the arrival of spring, the fear mongers at the IRS launch into their annual campaign to scare the American public.

IRS Loopholes: The annual campaign

The annual campaign begins with a barrage of press releases. The PR specialists at the IRS start sending them three months before the annual income tax filing date, April 15th (a week from today). The press releases are more than just friendly “please file your taxes” reminders. They announce (or you could say, “brag about”) the convictions of an assortment of alleged tax evaders. This scare tactic has become a ritual to frighten U.S. taxpayers into paying up. Read on to learn this year’s IRS propaganda tactics.

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