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Clintonomics 101
By Charles Delvalle
Hillary is taking the U.S. by storm, isn’t she? Everyone knows how I feel about her. To sum it up, I hate dynasties. I think it’s stupid that the American public is obsessed enough about just a few families that they are willing to let them control the United States for decades. But let me get off my soapbox and on to the main topic – Clintonomics 101: a study of how Hillary will impact the economy. To first determine how bad she can mess things up, let’s first look at some of the big things she wants to accomplish.
You better be sure that I have an issue with universal healthcare. The problem with healthcare is that the people who don’t have it usually choose not to because they can’t afford it. So in essence, the problem is that people can’t afford healthcare. So the question should be - how do you make it more affordable? If she passes universal healthcare, it will add more government spending and bloat to a system that already isn’t working. Middle-class tax cuts sound OK. I personally think a lot of higher-income people received tax cuts that they probably shouldn’t have received. Even Warren Buffet believes that same thing. But these tax cuts should be offset by spending reductions in order to not add to the U.S. deficit. In the end, I think eliminating income taxes and replacing them with a production or consumption tax (on non-essential items) would fare better. At the end of the year, if you earn under the poverty line, you send in a form and get a refund for the consumption tax you paid for.
That way, taxes are based on how much a person spends, not on how much they earn. If you’re rich, you pay more. If you’re poor, you get a refund. It also encourages people in the U.S. to save more. And you have to admit, not many people here save. And that means anytime we have an economic slowdown, it’s made worse because people run out of “rainy day” money a lot faster. Last, there’s the $50 billion strategic energy fund. I think this is a good idea and wish it would have been implemented a long time ago. The government should ramp up spending on alternative energies, and they should be looking for a way to get us away from oil as soon as possible. That means building the infrastructure and helping get the cars out into the public. How does it get paid for, you might ask? Well. you can do a few things. You could reduce military spending (which is freaking massive!), you could eliminate certain tax breaks for oil companies, and a few other things, too. Right now, the government is looking to give away $150 billion. Why? So people can spend it on iPods and plasma TVs. Instead, why not put that $150 billion into alternative energies? That would increase jobs in the industries of the future (which are higher paying). Plus, it helps us reduce our trade deficit (by importing less oil), keep more jobs here, and gets us away from relying on the Middle East. So what do I think of Hillary’s plans? I really don’t like her universal healthcare plan. The others are OK. But as they say, “the devil’s in the details.” Just realize that Hillary is big on domestic government spending. She’s practically a socialist in disguise. But increasing spending will be hard when the country is entering a recession. And it’s even harder when she has to spend billions in Iraq. Plus, the solution to economic problems is rarely in the government’s hands. What the government should do is help bring about innovation and change. Not give handouts because people bought a new kitchen at Home Depot when they should have been saving up for a rainy day. Next week, I’ll cover Mitt Romney and see how he fares. Oh, and if you have any questions you want me to cover on what they plan on doing to our economy, just shoot over an e-mail to feedback@investorsdailyedge.com and I’ll be glad to include it in next week’s article. To your success, Charles [Ed Mention: Charles closed out another big win for IDEs Global Profits Hotline. Just two weeks ago he told readers to buy puts on the Nymex Exchange. Just six days later, those puts were up 98%! To learn more about how you can join IDEs Global Profit Hotline readers profit as the market crashes, click here ]
Ride or Slide: Seabridge Gold
By Charles Delvalle Last Wednesday, I asked readers to let me know if they should let a stock ride or slide. Well, I got a lot of e-mails. So before I go on, let me lay out some ground rules. Only send one stock at a time. One person actually sent me a list of 40 stocks. I obviously can’t cover that many. Heck, looking into just one stock can take HOURS! I won’t be able to cover every stock I get. So what I’ll do is cover stocks that a few people are interested in. With that said, the most popular stock this week was Seabridge Gold (SA). And with good reason. This stock has dropped from 40 down to 25 in just a few months. There are a couple of things I like and dislike about this company. First, I don’t like the fact that SA hasn’t hit new highs alongside the price of gold. Usually, a company the size of SA should be more linked to the price of gold. Second, I think in the short term, SA had some technical damage done. It broke under its 200-day moving average and it’s overbought. This means it might go down in the next week or two. But not all is bad. I do like SA’s long-term outlook. They’ve been on a solid uptrend for years, they own the second-largest undeveloped gold project, they don’t mine, they could easily be a takeover target, and they are linked to one of the biggest bull markets we will ever see. If you’re not scared by short-term fluctuations, then do yourself a favor and let Seabridge Gold ride. Charles P.S. Want to see me cover a stock? Send an e-mail to feedback@investorsdailyedge.com
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