That’s okay. It gives me plenty of time to stare at the ceiling and think.

Last night, on the heels of Obama’s speech, I had a lot on my mind. While talking about the military struggles in Afghanistan, the 11-month president looked very “Bushish.” Whether you find that a good quality or not, is up to you.

But Obama’s mention of the nation’s resolve, or lack thereof, struck me. He mentioned the fact that after 9/11 the country was fully united. Yet today, we could not be further apart.

It’s the first time Obama and I have agreed in a long time. (Maybe I’m getting what my wife has.)

Unless this country can get together and put partisan maneuvering aside, we’ll never move forward.  That includes economically.

Resolve is a word rarely used by investors, but it’s one that should be in our vernacular. Without it, we have no long-term strategy and, to borrow an overly popular term, we have no exit strategy.

Sure, when I first got into this industry, politics played a large role in Wall Street’s day-to-day maneuvers. But it was nothing like today, a market where Washington can create red or black with the stroke of a pen.

Investors don’t need a degree in finance. They need to spend four years studying political science. That’s not good.

I don’t agree with Obama too often, but when he calls for increased resolve, I’ll follow. But all I represent is one vote. For real action, all of us need to stand behind the notion of fixing this country and strengthening our once-fierce might.

At any point, but more critically than ever, the direction of the Dow is far more important than the direction of Obama’s approval rating. Until we get Congress to vote for what’s good for the country instead of what’s good for the party, my view of the economy is bearish.

And it’s getting worse every day.

There is no denying we all want to get rich. There’s no lack of ambition or will in that department. But until this country finds the resolve to work together and put political differences aside, our economy is going nowhere.

*** We have aptly proved the value of shorting the American economy over at TFN Strategic Trader.

Earlier today, we sold three more positions for yet another cluster of double-digit gains. Out of the three options plays, two were put contracts that soared as the value of natural gas plummeted and another was call contracts that surged as the world turned its back on America’s economy and fled to Asian growth opportunities.

In all, we locked in gains of 33%, 55% and 50%. Even better another set of put contracts is currently worth gains of 300%.

It’s all thanks to the natural gas markets.

I recommended some selling today because tomorrow is likely to be a pivotal day for the industry. November is typically the first moth to see a drawdown in the nation’s gas stockpile. So far, we haven’t seen it.

Even with storage capacity at 99.9%, the nation’s gas producers continued to put more into storage facilities than the nation’s users could pull out.

But tomorrow, that is likely to change. If the week’s inventory report shows a drawdown, a skittish market is likely to send gas prices higher, at least temporarily. With options, that means we’ll be exposed to the detrimental effects of time decay.

So we sold today with the hopes of “resetting” our entry prices even lower in the near future.

You can either get in on the action here, or you can read about our gains in the next couple of weeks. Your choice.

*** Finally, it’s a good day for corporate executives and a horrid day for organized labor. Down at the local Harley Davidson plant, the union voted to ratify its latest seven-year contract with a 1,587-to-193 vote.

The new contract will most likely force Harley to call off the dogs and cancel its plans to move the plant to Kentucky, but it also cuts nearly 1,000 jobs and forces the union to take serious concessions.

Now workers will actually have to show up and work.

Even when the pendulum is swinging towards socialism, there are signs of capitalism at work. Doesn’t it make you feel good?

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.

After last night, I’m ready to get out the 00 buckshot, myself.

I’ve got my eye out for good intentions, gone bad after spending the last three editions of Notes discussing the idea of financial regulatory reform.

During 52-mile commute home yesterday, they were all over the place, anything from idiotic signs to a couple of state cops setting a trap and writing tickets for not moving to the left lane when passing a stopped emergency vehicle.

The gung-ho troopers had rush-hour traffic slowed for over a mile.

But my mind really started spinning when I passed an out-of-state big rig. I could not help but notice the federal and state ID numbers stenciled onto his door followed by a host of annual registration decals from a cornucopia of states. Between the tolls, the permitting fees and the growing list of regulations, it’s no wonder the trucking industry’s bottom line collapsed.

Once I finally crossed the creek and pulled into my driveway, I was ready to sit down and relax by turning on the local news. Let’s just say it’s a good thing the guns are locked up. That TV would still be smoking.

Here’s what the local news “personalities” had lined up to tell us.

They started with a lead story about Harley Davidson’s plans to abandon its largest manufacturing plant at the heart of our local community. Unless it gets strong union concessions in the next few weeks, the company plans to pick up and move to Shelbyville, Kentucky.

Can’t say I really blame the company. The local union tends to form a picket line every other year.

After a short break to show off the latest products from GM (a commercial you and I paid for), the news was back on. This time they were discussing how a local homeless shelter had reached full capacity and is now forced to turn dozens of needy folks away each day.

The bright side of Harley leaving is the county will have all the space it needs. Most of the abandoned Caterpillar factory remains empty as well, just a couple of miles down the street.

Next up was the neighboring city’s news of layoffs and a tax increase. With revenues down and the state battling a budget crisis of its own, the mayor is writing up pink slips and preparing new tax calculations.

He’s even interested in sending local churches a tax bill, noting a third of local property owners don’t pay a penny.

After that cheery bit of news was another story of layoffs. This time it is the state of Pennsylvania cutting 319 jobs, taking the total reduction for the year to 769, plus 2,000 unfilled positions.

But don’t worry. The state’s lawmakers have decided to forego their annual cost-of-living raise. Their pay will stay at $78,000 this year.

I finally gave up on watching the newscast after the “investigative team” revealed we need to keep a close eye on those lobbyists hanging out with our lawmakers.

There’s a news flash.

The state’s two top lobbyists, natural gas drillers and the tobacco industry, appear to be better represented in the state’s capital than any of its constituents.

After missing a legally imposed budget deadline by well over 100 days, the state was hit with a bevy of new taxes and program cuts. The only two groups that came out ahead were, you guessed it, gas drillers and tobacco producers.

The smokeless tobacco industry kept its ultra-low retail tax and another 30,000 acres of Penn’s woods are now open to Marcellus Shale drilling.

With that much lobbying taking place, one would naturally think us tax-paying folks would be able to find out who was the grand recipient. But politicians are sneaky.

Because they write the legislation, they know the best way around it.

It turns out, no state lawmaker has surpassed the public-disclosure thresholds for lobbying gifts and contributions. Go figure.

I have to get a permit to nail a shed up in the back yard, but they can rob us blind and its 100% legal.

After that bit of news, there was twelve minutes remaining in the newscast but I couldn’t take any more. I went down to the garage and cleaned my gun.

*** It is good news for TFN Strategic Trader members. As natural gas prices plunged by close to 7% today, our recent play against the trend is paying off big time. All four of my recent picks are up by double-digit proportions, with one big winner now worth gains of a whopping 385% as the underlying position sunk to record low territory.

There is word spreading across commodity trading pits that the nation will continue to inject natural gas into its reserves throughout November, the month when withdrawals typically occur. I said this would happen months ago.

To see what will happen next, read this report.

*** Gold prices keep soaring. And investors keep wondering when they’re going to bump into the ceiling.

Some blame the weakening U.S. dollar for gold’s rise. Contrarian maven Bill Bonner extended that to the weakness of all “fiat” currencies — not just the dollar. My colleague Christoph Amberger over at TFN was a tad less general. He pointed out today that gold actually traded at $200 less per ounce in 2008… when the dollar’s exchange rate against the euro was even lower than today, at $1.63.

He thinks the main factor behind the dollar’s relative decline to gold is the fact that it doesn’t pay to own dollars any more: “Zero-point-seven-five percent APR on a CD? That’s just marginally better than the lint in your pockets! Now, gold is an asset notorious for not generating returns other than speculative gains. It doesn’t pay interest or dividends. But at this point, neither does the U.S. dollar. Or the yen. Or the euro, pound sterling, Icelandic krona: “The comparative opportunity cost of holding gold has been eliminated! Plus, the cash flows out of the dollar have created an asset bubble that will keep inflating!”
How long will this last?

As long as the Federal Reserve keep punishing dollar savers with non-existing interest rates! That may be at least another year: “Not because the world is abandoning “fiat currencies”… but because holding dollars is a losing game now — engineered and maintained by the U.S. government!”
So far, the team over at TFN’s Hot Stock Confidential has been rubbing their contrarian hands as gold went up: Bullion may be up twenty percent for the year. But HSC’s silver stocks are beating that yield by multiples! Just today, the team took 32% gains in just over a month on Silvercorp.  Amberger points out that this was double-digit gainer #70 for HSC members so far this year.

But they’re not abandoning precious metals. Not at all! Here’s what they’re up to: “Our next Hot Stock Pick is coming out this Thursday. With gold futures at record highs of US$1,151 an ounce today, we’re going to stick with a precious metals pick: At today’s levels, the gold reserves of this junior Canadian gold miner are worth a whopping $460.4 million!

“Let’s put that into the fuzzy math of financial newsletter marketers: With 333.42 million shares outstanding, $1.70 currently buys you 1.38 ounces or $1,589 worth of that gold! As gold prices keep moving up in the great game we call the Commodities Carry Trade, this U.S.-traded stock could snag you a cool 30% gain before New Year’s.”

Hot Stock Confidential members will be receiving this Hot Stock Pick of the week tomorrow before noon. You might want to be one of them. Join up right here.

Earnings Announcements: Novellus (NVLS)

I must be looking at the equities through a different lens, because what I see and what Wall Street is apparently looking at is much different. Somehow the market remains positive, yet signs of ominous doom continue to build. The charade cannot last.

Just look at Harley Davidson’s (HOG:NYSE) earning report yesterday. Because domestic sales dropped by more than 13% during the year’s first quarter, the company will cut its annual production by 27,000 motorcycles and fire 8% of its workforce. That is not going to help the economy.

This news should be a neon sign that the economy is in trouble. But it hasn’t been.

You cannot open a newspaper without reading of major job cuts. The banking industry got slammed, now the ripples are spreading throughout the pond. Unfortunately, these waves are not going to slowly diminish, they are going to get larger and larger until they come crashing to shore.

This old mule ain’t what she used to be

We need to stand back and take a look at what has been driving the American economy over the past few years. It is a good opportunity to re-visit Alan Greenspan’s “irrational exuberance” phrase.

The market was overvalued. Fundamental value no longer had a meaning, but as long as values kept rising, everybody was happy. In the end, if things got too expensive, we could just take out a larger home equity loan. The world was grand.

But now, it takes sheer insanity to be willing to pay the prices some equities are getting. Let’s face it, the economy is moving backwards. Home values are plunging. Consumers are buying less. And manufacturers are scaling back.

Down and down we go

It is creating a vicious circle that will create more job loses, reduce consumer spending even further, and slow the economy that much more. Just in the last week, thousands of Americans lost their jobs. It is only going to get worse.

If there is one glimmer of hope (it is what is propping up the market today), it is the global markets. Even Harley Davidson admits its overseas sales were strong. Caterpillar announced the same thing this morning. While the economy is slowing here and the dollar continues to plunge, foreign economies continue to plug along… at our expense.

But I cannot be so naive to believe those countries will not be affected by our economic downturn. This is a global economy that is heavily linked to the prosperity of the American economy. If we stop buying, the countries that make those goods are going to be in serious trouble.

This is just the tip of the iceberg. Yesterday, people bought less motorcycles. Today, unemployment lines are growing. Tomorrow, who knows?

I bet it won’t be pretty.

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. Sign up through your favorite reader here. Or, if you prefer, have the feed delivered to your email.