MarketClub TV for 10/18/12: It's official, the US is now spending $1,000,000,000,000 in welfare payments!

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 18th of October.

It's hard to believe or even fathom that the United States should be paying over $1 trillion a year in welfare benefits. This is an unsustainable number by anyone's math.

Because of this massive expenditure, we're going to see gold skyrocket as paper money becomes worth less and less when reality sets in.

If you were around in the 70's and thought inflation was bad then, it's going to pale in comparison to what's coming up. The only value will be held in land, gold, and raw commodities that can be traded on a barter system.

I hate to sound so negative, but the reality is we did this to ourselves and have no one else to blame.

Let me put this whole scenario in perspective: If you had spent $1 million dollars a day, every day since the time of Jesus Christ, you would not have spent even close to $1 trillion. I think that illustrates just how much money we are in the hole for.

Even the president of Iran is predicting the impending downfall of the US empire. His analysis is based on the collapse of the country's massive debt. Here is his direct quote: "How long can a government with a $16 trillion foreign debt remain a world power?"

Like it or not, the situation the US is facing now is dire. We must get real, we cannot listen to pie-in-the-sky politicians anymore. It's time we all do some hard digging and forget all this class warfare. We all have to get out of this hole together.

Enough on that subject, let's take a look at what is going on right now in the markets.


EQUITIES: Trading range. The trend is your friend and the major trend according to our Trade Triangle technology is still positive.

CRUDE OIL: On our watch list. The long-term trend is positive for crude and the intermediate-term trend remains negative based on our Trade Triangle technology. Watch this one closely.

EURO: All systems are go. All three of our Trade Triangles are green and are bullish for the Euro. Watch the resistance at the 1.3160 level. Target Zone of 1.3500.

GOLD: Long-term Trade Triangle positive. Look for support around the $1,725 level. A move over the $1,760 level turns the trend back to the upside.

COPPER: Long-term Trade Triangle positive. Two of our three Trade Triangles are green.

SILVER: Treading water. Long-term Trade Triangle remains green and bullish on silver.

WILD CARDS: No changes. Here are the usual suspects: Syria, Turkey, Israel. The general election, Fiscal Cliff, and let's not forget Greece and Europe.

Every success in your trading today, tomorrow and in the future,

Adam Hewison
President of and co-founder of

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8 thoughts on “MarketClub TV for 10/18/12: It's official, the US is now spending $1,000,000,000,000 in welfare payments!

  1. Sorry, this article isn't accurate.

    1) Re: Gold will skyrocket... The number of dollars is only part of the supply/demand equation. You need more than one number to make reliable predictions.

    2) Re: The connection between welfare payments and inflation... You haven't actually drawn or implied a specific causal connection. In any case, I see no reason to assume that putting money in the hands of poor people will increase gold demand. If you are worried about the price of gold, then you would probably be better off looking at the number of dollars in rich hands.

    3) Re: "If you were around in the 70′s and thought inflation was bad then,"... The current economic problems bear about as much resemblance with the inflationary problems of the 70's as a fish does to an elephant. The simplest proof of that is interest rates were well over 10% in the 70's and are approaching 0% today, just like during the Great Depression or Japan's lost decade(s). When interest rates are near zero, then deflation is a worse danger than inflation. That is just simple math. All the dollars in the world won't drive prices of goods up if none of them are in hands that want those goods. Interest rates near zero means the dollar surplus are in hands that want to SELL those goods, rather than hands that want to buy those goods.

    4) Re: “How long can a government with a $16 trillion foreign debt remain a world power?”... First, there is a huge difference between $16 trillion in foreign debt and $16 trillion in debt. Also, if you look at when the debt started, it was mainly Reagan, Bush, and Bush. If you took away interest on Reagan and Bush's debt, then Clinton paid off the remaining debt from world war II completely. Meanwhile spending has been relatively flat percentage wise and hasn't changed much from the times back when we had much higher growth and much higher taxes. England lost out to the neoliberals in the mid 1800s and had become a satellite economy within the next 50-100 years, so this is definitely a risk, but we should worry more about the economic drag of being an unbalanced economy more so than the debt itself. In the 1920's, we had a similar mountain of debt, but it was more focused on the private sector. That debt was what FDR was referring to when he gave his famouse "We have nothing to fear but fear itself" speech.

  2. There was this French Economist, Frederic Bastiat, in the 1800s who said, "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."

    1. This is a good statement of tragedy of the commons. The missing piece, though, is we don't often discuss who suffers most under tragedy of commons. Those with cows, of course (using the classic example of cowherders overgrazing common lands). Similarly, the greatest damage when the rich become good at advancing their wealth through political means is done to those rich people that advance their wealth through value creation.

  3. The global economy is actually strengthening. The JPY has been unwinding and that is because risk is on and that is good for commodities but they are not going to benefit as much as you think because the global economy is actually looking up so people will still be putting their cash outside of commodities, in cash and in stocks. Sorry to burst your bubble... Pun is intended... lol

  4. A trillion in welfare payments is nothing compared to the amount of money that has been spent on war even before the financial crisis. People are out of work and they can't find jobs, if we had not spent so much on the military before the crisis happened nobody would even be talking about how much we are spending on welfare right now.

    1. Agreed. Better that this money comes back to the people instead of the bankers, arms manufacturers and bail out cabal. No problem with these figures, its where it deserves to be- helping people, instead of blowing up millions of Arabs around the world and funding FEMA Camps and coffins.

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