by Michael M. Pennington

I realize many of you may disagree with me on this but I am pleased that the Bailout Law was defeated in its present form. At least for awhile longer our nation voted against a massive socialistic power grab. This entire crisis was planned by the government. If you remember Chairman Greenspan actually encouraged new home buyers and refinancers to use ARM’s and he likewise went on record saying that these derivative swaps were a good thing that they helped balance the economy. Even Warren Buffett answered him by calling these securities a “ticking time bomb“. The SEC Chairman Cox passed several rule changes that accelerated the demise including doing away with the uptick rule on short sales. Again the Government passed laws pushing people who couldn’t afford homes into mortgages that they couldn’t pay. Then they forced banks to buy this bad paper or face PC racist repercussions. But the bailout law included just about everything - foreign banks, money
market funds, FDIC, Wall Street etc. etc. FED money  has lost its value and we will see a continued movement toward gold ownership because gold is the only honest currency. This morning the FED added $2 TRILLION in liquidity to the economy and so did several other central banks. The FED also said it would add several more TRILLIONS if need be. Those in the know also said the $700 BILLION bailout was just an initial amount and that $700 BILLION was renewable and could end up in the TRILLIONS. The friends of those controlling this country are all well taken care. Goldman Sachs was going to lose $20 BILLION due to the collapse of AIG. After the government bailout, they lost zero. The taxpayer picked up the tab of $85 BILLION to make sure Goldman had no losses. Even if this Bailout Law had passed, the crash was only going to be delayed. There are over $415 TRILLION in notional derivative paper in the market that is worthless. This problem hasn’t even been
addressed yet. The question might be do we experience a harsh downturn and turn over TRILLIONS of dollars to the Secretary, or do we experience a harsh downturn without giving the “BOYZ” TRILLIONS of our dollars.
GOLD - Instead of soaring  up $100, as it should have, you can bet the government is doing everything they can to keep a lid on gold and silver. How much longer they can do this is anybody’s guess. It should be noted that the Euro collapse today which normally would drive gold lower.It looks like gold is beginning to trade as the ultimate currency - one with no agendas and no obligations. Physical demand is soaring now so it seems like gold and silver will eventually have to go up substantially. It is disturbing to me personally when commentators asked for the market to go down more so the regulators will realize they made a mistake and pass the law.So while the government is intervening in what used to be free markets you can bet they will keep the pressure on stocks and bonds. It’s how they get their way. What is pathetic is that the same politicians who passed all these lousy laws are the very ones now clamoring for the government to fix what they
helped create in the first place. Regarding gold stocks, remember what I said about paper burning. The price of Gold is up 6% while the gold stock index is down over 5%. When you buy gold and silver, buy the physical! For weeks now I have been warning about SELLING ALL STOCKS. I really hope everyone took precautions in this regard.There will be a time to get back in, but now is definitely NOT the time. Things will change rapidly with each day. Let us all hope that God blesses us with peace and serneity during these troubled times. MIKE