Fannie, Freddie, The Treasury Lifts the Limits. What It Means and What to Do

The treasury came out on December 28th and lifted the limits on how much the two companies would be getting from the treasury to stay alive. The two highly bankrupt companies had a limit of $200 billion each from the treasury. This signals 2 things: The first is that the housing market is still horrendous and it will get much worse. The second is that the government is not going to let these two companies not go under just as they did not let the banks go under. We have seen how the still so bankrupt bank stocks did even though they are still largely bankrupt. My call -despite morally and intellectually disagreeing with what is going on with keeping these bankrupt companies alive- is to buy the stocks of Fannie and Freddie. When I say buy I do not mean go and buy a truck load of stock, but rather a tiny portion of your portfolio. Personally I am keeping it at approximately 3% of the money set aside for possibly buying stocks. I remind you that my main investments are gold and palladium and I recommend putting a bulk of your investments into hard assets for the long term. The fact that Treasury is willing to save these firms at any cost is yet another sign that the dollar is going to be under a lot more pressure going forward as the housing market and the economy continue to be in shambles and will get much worse and the government does not care about the dollar aparently. SO go ahead and buy a few more gold coins. You should get your hands on physical gold before it is too late. When this thing folds out, it will happen very quickly even if it takes 10 years to fold. My personal guess would be 2 to 5 years, but I can see it lasting longer. It definitely will happen though. History is on the side of it definitely happening again.

Also, do not be bothered by the recent fall in the price of the gold. It is complete illegal manipulation by the Federal Reserve and most likely NY Fed and a few big banks such as JPM and GS. They can only do it so much and for so long. If you follow the intraday trading or even the daily trading and how the paper gold market trades, you'd have to be blind not to see that there is heavy manipulation and in the longer run that is amazingly awesome for where the gold price will end once the ploy runs its course.