Raise or Default?

  Surely you're familiar with the controversy that America faces over its deficit. Do to uncontrolled spending the U.S government now faces a very tough choice -let america default on its debt, or raise the debt ceiling. House speaker John Boehner said last week that it would terribly irresponsible to let America default on it's debt, but it would be even more irresponsible to raise the debt ceiling without making any serious cuts to government spending.

In my opinion, if the American government doesn't get it's budget organized and arranges the appropriate budget cuts, this deficit issue is going to become an annual occurrence. Raising the debt ceiling without making any adjustments to it's just plain irresponsibility. Although making adjustment to government spending may bring some undesirable consequences, in the long run is the best move. It would put American on solid ground for the future, and this issue wont persist later in eventually become unbearable

Furthermore, the secretary of the treasury Tim Geitner said that if the appropriate measures are not taken to correct this issue America will be pulled back into a financial crises as bad or even worst that the one the country is just now recovering from... I know, scary thought.

The GOP and Democrats should get their house in order, and find some middle ground on their differences and so they can address the most delicate issue that America is now facing. The GOP should take a look at their budget plan which proposes some excessive cuts to some key issues of the American way of live. Mr. Obama probably did go a little overboard calling the GOP's plan unAmerican, but it's well on it's way. Medicare and Medicaid are two programs imperative to the American people and the GOP's plan practically wipes them out.

So the question remains, what would the brilliant minds that lead america do? let the country default on it's debt or raise the debt ceiling? I really hope it's the second one, but with the appropriate cuts to government spending. If not, well, we're heading for a wild ride not so long from now.

Okay oil and commodities are finally down, what's next?

For the past couple of months there has been panic over rising commodity prices. Escalating oil prices were supposed to be pulling us back into recession. Gold and silver were hitting all time highs on consecutive days. And when Mr Bernanke, the man who's driving the economy, was caught saying that this surge in prices was temporary and was not a cause for concern, he got crucified. Investors were selling retailers and industrials left to right thinking, logically, that high pries were going to drive down the stocks.

So what in god's name happened today? Oil finally surrenders that $100 level it had been holding on to for quite a while now, dropping a whopping $10 and settling at around $99. Gold and silver also took a hit falling over $10. And yet -this is the part that I don't get- the sense of panic seems to remain? Let me get this straight. All of our worries over commodities have been lifted of our shoulders and instead of acting relieved we look for reasons to keep feeding this pessimistic mentality. Are we now supposed to panic over the drop in commodities?

No!! Don't panic!! Maybe a week or so ago if you panicked you weren't consider a fool, but you definitely are if you do now. It's time to buy the stocks that were sold because of the high prices in commodities. Think industrial. This earning season the 75% of the companies on the industrial sector that have reported have beaten earnings expectations. This trend will be even stronger now that commodity prices have pulled back.

Trust what makes sense, and in this case what makes sense is that this drop on commodity prices has eased a pressure that has been mounting on the markets for the last couple of months. Lower commodity prices, especially oil, will ultimately be good for the markets and the economy.