Many people in the United States and internationally are expressing strong disfavor with the U.S. Federal Reserve’s recent declaration to purchase an additional $600 billion in U.S. Treasuries in order to stimulate growth in the United States.  In the absence of a fiscally responsible U.S. federal government, and U.S. industrial leaders who have an allegiance to the U.S. (the very structure which provided them opportunity) and act accordingly by creating jobs here, we believe – until proven otherwise – that the action taken by the U.S. Federal Reserve is not only well intended, but also necessary.

In the United States, there is presently no other government body other than the U.S. Federal Reserve that has proven itself capable of DECISIVE action that can shift the trade balance landscape in a manner that will serve our country AND aid in balancing the global economy over time.

Leadership doesn’t come without a price.  Federal Reserve Chairman Ben Bernanke is taking heat over his decision.  He’s standing up to it.

It shouldn’t come as a surprise to anyone that the countries that have the most to lose by the U.S. acting unilaterally on currency exchange, are the ones complaining the most.  For at least two decades, China has enjoyed the benefit of receiving U.S. dollars in exchange for goods on a volume of scale heavily influenced by their cheap currency.  They have then taken those U.S. dollars and purchased U.S. Treasuries, which has aided significantly in keeping interest rates stable to low in the U.S., which encouraged further American consumption of goods produced off-shore in their factories.  This has also provided a market for U.S. Treasuries that has allowed the U.S. government to access for prodigious spending.

Just as American homeowners were effectively able to hang an ATM on the side of their home, by refinancing at historically low interest rates (aided by the strong U.S. Treasury market, mentioned above), so too the U.S. government has an ATM machine hanging on the U.S. Congress building labelled U.S. Treasuries and Social Security Taxes.

Just as American homeowners often made poor choices by spending beyond their means on consumer goods that waste away, so too the U.S. government has been able to spend prodigiously on many fruitless activities.  How else could our U.S. government continue to participate in Afghanistan for 10 years at enormous expense – putting our military and non-military personnel in harm’s way – without a plan to WIN?

We can go on about our grave disappointment in our fiscally irresponsible U.S. government that has taken us on the brink of destruction.  But that will serve no one.  Instead, we are taking responsible action where we can as citizens.

From an investment standpoint, when the U.S. dollar stabilizes, we believe the the U.S. Federal Reserves actions will help business in America and provide an opportunity for stock investors.  We are ready here at the Stock Market Companion to strongly help our subscribers in identifying and participating in excellent stock investments.

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Please remember – at the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the counsel of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.