I Need Another $1.2 Trillion, (please)

I Need Another $1.2 Trillion, (please?)!

No BS Weekly Update - December 27, 2011

In This Issue

Performance

Headlines

Recipe

Health Tip

Dear ,

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest we become bankrupt. People must again learn to work, instead of living on public assistance."

How many of you think that quote offers some pretty good advice on how to fix the financial mess we are in as a country? We'll come back to this quote in a minute.

(Click to read article)

That's the headline from today. All except the please part, I added that. It sure would be nice if they (the government) said it once in a while, wouldn't it? We are almost out of money, AGAIN. This was part of the budget deal struck this summer. For the next two years these increases are automatic unless Congress steps in to stop them. We have gone from debating whether it is a good idea to continue borrowing this country deeper into debt and we have now made it automatic.

Folks, that headline is an indication of why I don't believe this country will ever fix its debt problems until it is forced to, like Greece. Here is what I mean.

What is a politician's number one priority?

If you said "to get reelected" congratulations, you're as cynical as I am. Unfortunately it is real life experiences that have caused that cynicism. If your goal is to get reelected, is it a good career move to tell the voters that they can't have things that you have led them to expect over the years? Of course not.

The simple fact of the matter is that when push comes to shove, I don't think we will see the political will necessary to make the changes needed to fix the problems, until a catastrophic financial event forces those changes on us. Why do I believe that? Because you can't show me a single country in history that has ever made these types of changes voluntarily.

Just look at how we have tried to solve things. A couple of years ago President Obama empaneled a "blue ribbon commission" to give recommendations on how to solve the problems. When he received the report did he implement even one of the ideas? Nope. Kicked the can down the road.

Then this summer as part of the budget deal a super committee was created to fix things by the end of November. Did they do it? Nope. Couldn't come to an agreement. Kicked the can down the road again. Now we have this payroll tax extension of two months, again with a committee to work out the differences that stopped a longer term agreement this December. How many of you think they will succeed? Are you beginning to see a pattern here?

Improvise, Adapt, and Overcome!

As many of you know, both my sons are Marines and my daughter is married to a Marine so we are steeped in Marine culture in our family. One of the things that Marines are taught in battle is to recognize their situation and then Improvise, Adapt, and Overcome.

Let's recognize the financial situation for what it is and then let's Improvise, Adapt, and Overcome.

One of the situations that we have to recognize is that the government has a vested interest in keeping interest rates extremely low for as long as they can through a technique called Financial Repression.

Unfortunately Financial Repression punishes savers. For many retired folks living on a fixed income, even though they followed the rules and saved for retirement, now they find themselves unable to generate the interest income that they had been led to expect based on normal, un manipulated interest rates.

Improvise, Adapt, and Overcome

Would you like some options?

While we have been big advocates of the idea of keeping a significant amount of money in safe investments like CDs, Money Markets, and Fixed Annuities, some people no longer have that luxury. Even people who had taken a very conservative approach by planning on withdrawing only 4% of their nest egg per year, through no fault of their own, are finding it hard to find a five year CD that pays even half that rate.

If you have reached the point that you are either unwilling or unable to let your money sit there earning almost nothing any longer then please join us for our new webinar:

(Please click to register)

We are going to offer our newest study as a webinar on December 29, 2011 and again on January 4, 2012. The webinar will be offered at 11:00 AM, 2:00 PM, 5:00 PM and 8:00 PM on both of those days. That way you can learn from the comfort of own home.

What will we cover?

We will take a look at what led us to this point of extremely low interest rates, the outlook for those rates going forward, and then most importantly we will share with you some exact strategies on ways you may be able to benefit instead of being punished by this artificial lowering of interest rates.

If you would like to join us please click on the link below.

(Please click to register)

http://www2.onlinemeetingnow.com/register/?id=e08ad12324

If you know of anyone else that could benefit from these ideas, please feel free to forard this invitation to them.

Now back to the quote.

This quote was from 55 years before Christ was born. Remember I said that you can't show me a country in history that has voluntarily made the changes necessary? That's how far back I looked and that's why I'm pretty confident that we can foresee how this ultimately ends!

ECONOMIC CALENDAR:
Monday - U.S. Holiday Observed - Christmas Day
Tuesday - Consumer Confidence, S&P Case-Shiller HPI
Wednesday - EIA Petroleum Status Report
Thursday - Jobless Claims, Chicago PMI, Pending Home Sales

Performance

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.

Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.

Indices are unmanaged and cannot be invested into directly. N/A means not available

Headlines

Gasoline rose to a six-week high after a U.S. government report that durable goods orders increased last month signaled an improving economy. Prices advanced 8% this week, capping the biggest weekly gain since March.[5]

While some workers are worried about smaller paychecks next year, more than 1.4 million low-income earners will see their wages go up on New Year's Day. Minimum wage rates in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will rise between 28 and 37 cents per hour on January 1, thanks to state laws requiring that minimum wage keeps pace with inflation.[6]

The total value of Americans' retirement assets stood at $17 trillion at the end of September - a drop of 7.5% from the record high of $18.4 trillion recorded on June 30, 2011.[7]

Shoppers will return $46.28 billion in holiday merchandise, a record high, according to the National Retail Federation. At brick-and-mortar stores, holiday returns can boost business because it gets shoppers into the store once more. "If people return something, there's a 70% chance they will buy something else," said Britt Beemer, retail analyst and chairman of America's Research Group.[8]

"The inherent vice of capitalism is the unequal sharing of blessings; the inherent vice of socialism is the equal sharing of miseries." -Winston Churchill

Cheese and Herb Mini Sweet Peppers

These colorful stuffed peppers will brighten up your appetizer tray.

Source: Better Homes and Gardens

Ingredients:

30 red, yellow, and/or orange mini sweet peppers (about 12 oz. total)

18 ounces semi-soft goat cheese (chevre)

1/4 cup snipped fresh chives, tarragon, basil, or thyme

Fresh basil leaves

Directions:

1) Preheat oven to 350 degree F. Leaving the stem intact, cut a slit along the top of each pepper. Remove the seeds; set aside. In a small bowl combine goat cheese and snipped herbs. Spoon cheese mixture into prepared pepper. Arrange filled peppers close together on a baking sheet. Bake for 8 to 10 minutes or until cheese is heated through and peppers are crisp-tender.

2) Use tongs to arrange warm peppers on a serving dish, stacking peppers into a pyramid shape. Garnish with fresh basil leaves. Makes 30 servings.

Wear a Pedometer

New research suggests routinely wearing a pedometer encourages people to walk about an extra mile each day, lose weight, and lower their blood pressure. Aim for at least 30 minutes of brisk walking and a total of 10,000 steps per day.[9]

Share the Wealth of Knowledge!

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Reames Financial is not an affiliate of Foothill Securities, Inc.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Google Finance is the source for any reference to the performance of an index between two specific periods.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Reames Financial and not necessarily those of Foothill Securities, Inc., and should not be construed as investment advice. Neither Phil Reames, Reames Financial, nor Foothill Securities, Inc. gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

By clicking on these links, you will leave our server as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

[1] http://www.marketwatch.com/story/us-stocks-look-to-keep-holiday-rise-alive-2011-12-24

[2] http://money.cnn.com/2011/12/23/markets/markets_newyork/index.htm?iid=HP_LN

[3] http://www.bloomberg.com/news/2011-12-23/u-s-november-personal-income-and-spending-text-.html

[4] http://www.stocktradersalmanac.com/

[5] http://www.bloomberg.com/news/2011-12-23/oil-has-biggest-weekly-gain-in-two-months-commodities-at-close.html

[6] http://money.cnn.com/2011/12/23/news/economy/minimum_wage_increases/index.htm?iid=HP_LN

[7] http://www.dailyfinance.com/2011/12/22/u-s-retirement-assets-declined-by-1-4-trillion/

[8] http://money.cnn.com/2011/12/21/pf/holiday_money_returns/index.htm?iid=HP_LN

[9] http://www.boston.com/lifestyle/food/gallery/healthtips?pg=2

[10] http://www.thedailygreen.com/environmental-news/latest/green-new-years-resolutions-10109

Phil Reames

Reames Financial

1856 Skyler Dr.

Kalamazoo, MI 49008

269-349-3966

preames@reamesfinancial.com

http://www.reamesfinancial.com