What...Me Worry?

Bernanke held true to form yesterday in a speech at the University of Michigan, providing equity traders with another blanket buy recommendation, as he reiterated his call that interest rates don't have a snow balls chance in hell of moving higher in the foreseeable future. And that foreseeable future is at least through the end of 2014. The Fed will roughly dump $80 Billion a month in new liquidity into the marketplace. He's not called "Helicopter Ben" for nothing. Granted we have an abundance of mixed economic signals, growth versus "new normal" stagnation. The "fiscal cliff" was averted to some degree, just don't let the common man in on how his paycheck shrank though an increase in the payroll tax.

Next up is a much more important matter and that is the potential raising of the Debt Ceiling. The U.S is set  to hit the debt ceiling in mid-February and given the rhetoric coming out of our dear President at his last first term press conference yesterday, expect one heck of a battle. He said he will not negotiate. After a contentious battle over the fiscal cliff negotiations where Obama demonized Congressional Republicans, don't expect Speaker Boehner or Senate Minority Leader McConnell to hand him any chance to take another victory lap. Get ready for a rock'em sock'em time on Capital Hill.

Let's be frank, the Debt Ceiling is a whole lot scarier than the Fiscal Cliff. If the borrowing limit is not raised, we could be flung into utter economic chaos. Our credit rating surely will be cut, likely raising rates and our borrowing costs. All sorts of payments would be jeopardized, like Social Security , Medicare, Defense and interest on the national debt. Spending cuts would have to be enacted immediately, fueling a potential recession.

In conclusion, it ain't pretty folks and to think this needs to be negotiated between President Barrack Hussein Obama and Congress should scare the hell out of you. Tell me what these elected officials have done for the good of the country lately? So look for each partner in this mess to ultimately pat each other on the backside as they kick the can down the road once more. This country needs a serious discussion on tax reform and spending cuts. I just hope it's in my lifetime.