The Tea Party Will End The Printing Party
As we all know by now most Americans are sick and tired of the Democrats and the Republicans. Just look at President Obama's approval rating which is now around 46 percent. They are certainly not happy with him and the Congress approval rating is even lower. However, as bad as his approval rating is the former president and administration was just as poor and at times possibly even worst. Simply put the American people want to take back their country and believe that both parties are spending addicts on the back of the American individual that works and pays taxes. The United States has accumulated a $13.5 trillion debt. Who is going to pay for this?
The Tea party wants to pay down debt and cut spending which is the opposite of what the Democrats and the Republicans have done over the past 30 years. This is a movement that is growing exponentially among the working American public. The Tea Party is filled with former Republicans and Democrats. This movement knows that the current path the traditional two party system has taken America is unsustainable and will lead to the demise of the country. After all the S&P 500 Index is still around 27.0 percent below its 2000 and 2007 highs. Do the American people want another lost decade in the economy?
Here are the reasons why the Tea Party will spoil the current market rally:
The first reason is because the Tea Party will stop the printing of money by the Federal Reserve Bank. As the central bank continues to print money and floods the system will liquidity the U.S. Dollar Index declines. Therefore, even if stocks go up they are actually worth much less because they are denominated in U.S. Dollars. Why do you think gold is making new all time highs right now? Gold is a way of telling how much money is being printed. Gold is the only true currency in the world. Fiat money systems eventually all fail.
The second reason why the stock market will roll over is because the spending party in Washington by the Democrats and the Republicans will be over. The Tea Party will most likely stop all the special interest programs that currently seem to be so popular. At this time the spending is out of control and really cannot be calculated. The 2500 plus page laws that Congress writes are filled with so many different pork filled special items. For an example, new rules about gold being put in the health care bill. What does gold have to do with a health care bill? Has anyone ever read a 2500 page bill before it becomes a law? I seriously doubt it.
The next reason why the Tea Party will end the way America currently operates is because they will get rid of the too big to fail rule that is currently in place. Do you realize that these giant banks still have tons of toxic assets that have been shoved under the rug for the time being. Just because the country has now switched to Enron accounting this does not mean that this nuclear waste can stay hidden forever. Banks such as J.P. Morgan Chase & Co. (NYSE:JPM), Wells Fargo & Co. (NYSE:WFC), and Bank of America Corp. (NYSE:BAC) have actually become bigger than they were in 2008. Then when you consider that regional banks fail every week they actually have less competition. This will not be tolerated by the Tea Party. Nouriel Roubini says, "if the banks are too big to fail they are too big to exist." The Tea Party agrees. Please note that the banks have been lagging the rest of the stock market since the Labor Day rally began.
The Tea Party is a true breath of fresh air. As long as the Tea Party does not get corrupted and remains a movement, this country is about to reinvent itself. There will be pain. A mother is usually in agony for a short period before giving birth. However, that pain is forgotten when the child is born. This is what is happening now in America. Go Tea Party!
Chief Market Strategist