The reality is the “Sequester” is similar to the “Fiscal Cliff” in that it’s blown completely out of proportion as a scare tactic.   The pocket change discussed being cut is so minuscule that if we can’t even agree on cutting this, how in the world does anyone think we can possibly fix a yearly deficit over $1 trillion dollars?

Will people and companies be hurt by these cuts?  Absolutely.  This is not to say that people will not be hurt.  It is a shame people must be hurt at all, but when the entire country is at risk, it’s a necessity.  Everyone must face some pain and these cuts must be deeper and more across the board so that everyone is sharing in the pain to fix our future.  One quick method to clean us up is simply going back to 2008 spending levels.  We’d cut about half of the deficit or more just by going back to 2008 spending levels as Ron Paul suggested over a year ago.  Want to see a REAL recovery?  Make the cuts, take our medicine for the next 12 months and watch us bounce back with a vengeance as companies/people digest the changes and overcome it like every other major depression/recession except the current one.

However, if you talk to the media or mostly left political figures at the moment, we can’t cut anything even though it contradicts earlier speeches from these same people that claim if we don’t balance the budget, cut spending and reduce debt, that our future will be bleak, especially for our children.  Anyone tired of this yet?  I know I am.  Make the cuts already, so we can fix our financial problems!

As I’ve noted many times before, Canada had very similar issues to us.  They cut $7 to $1 tax increase and grew jobs during the dot-com bust.

Trade Reaction: I’d be looking for odds of a short-term market pullback, but no collapse.  As long as the Fed is printing more money creating additional liquidity and inflation (therefore indirectly taxing you as your money becomes less valuable), I don’t see a collapse until the bubble grows much bigger.

Video:  Video doesn’t load on your browser?  See it on CNBC

For those of you who don’t know, Canada had very similar issues to us in the 90′s.  In response, Canada cut $7 to $1 in tax increases, balanced their budget AND grew jobs during the dot-com bust when the global economy was hurting.  Now, they are fiscally responsible and therefore better able to handle whatever the next problem their nation faces (many anticipating a housing bust shortly).  You can review a well-written (not mine) college research paper on the subject written in 2011: 

So, instead of learning from this fact, we seemingly do the exact opposite.  This current fiscal cliff deal, if those numbers above are correct, is over $41 in tax increases to $1 in spending cuts on over a 1.3 yearly trillion dollar deficit.

Sickening

Below, Santelli and company eloquently sum up our entire situation in America.  Everything from the Economy, Banks, Bernanke, Jobs/Unemployment, Bond Market to the path we are on.  I can’t say it better myself, so I won’t attempt to.  Watch the video for yourself and digest the information as it is very serious and important to understand.  It is unfortunate when knowledgable media individuals like him are drowned out by the clowns on all the various tv stations today.

I fear one day we’ll look back and say, “we should have listened more carefully to Rick Santelli’s concerns.”  I, for one, prefer to be wrong on that.

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike

Stock Radar with Price Targets

Good luck out there,

Mike