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Yesterday, the unthinkable happened: General Motors — one of America’s oldest, largest and most respected companies — went bankrupt.
This morning, this venerable, 100-year-old company …
This firm that survived two world wars … The Great Depression … the Korean and Vietnam wars … the oil shock, recession and runaway inflation of the 1970s … and scores of other shocks over ten long decades …
This great icon of American innovation and success … won court approval to begin liquidating its assets as soon as possible.
These are dark days indeed — a personal catastrophe — for GM’s employees and for hundreds of thousands of other workers at dealers and suppliers who thought they had jobs that would last a lifetime.
But the implosion of GM is more than just the guarantee of surging unemployment rates as far as the eye can see. And it’s much more than just the failure of one of our most powerful engines of economic growth.
For nearly a century, GM has served as a metaphor for the overall U.S. economy — the harbinger of things to come for the stock market, for investors and for every American family.
For nearly five generations, most economists accepted the mantra, “As General Motors goes, so goes America.” And those words were never truer than they are today.
The simple truth is, debt killed GM. The company could have easily weathered this economic storm had it not buried itself beneath a $173 billion mountain of debt.
Is America Next?
In its failed attempts to save GM, AIG, Fannie and Freddie, the entire banking sector and many other companies, Washington is now creating its own Mt. Everest of debt.
But Washington’s debt bubble makes GM’s pale by comparison — and it’s inflating the size of that bubble at the staggering rate of $3.8 billion per day.
As we’ve seen in recent weeks, Washington’s record-shattering spending binge is already crippling the economy. Treasury prices are cratering. Rising interest rates — the kiss of death in a weakening economy — are already increasing borrowing costs for companies and consumers.
Meanwhile, in what has proven to be a failed attempt to stop the surge in interest rates, the Fed is feverishly printing dollars — creating money out of thin air — to buy more than $700 billion in bonds so far this year.
So the question of the day — the single most important question any investor can answer now — is simply this:
Will America survive?
How do YOU feel rising interest rates and record-shattering money-printing will impact your income and investments in the weeks ahead?
Which investments do you expect to spin off substantial profits next? Select U.S. stocks? Foreign stocks? Currencies? Precious metals?
Your opinion is critically important to me personally and to all of us here at Weiss Research. Just scroll down and use this blog to let me know what you think.
My team and I will meet you there to address your concerns, answer your questions, respond to your ideas and help in any way we can.
Good luck and God bless!