Israel Eyes Anti-Iran Security Pact With Gulf States

Frozen credit markets. A plummeting U.S. dollar. Skyrocketing interest rates. That is the picture of America’s economic future being painted by the U.S. Treasury Department if Congress fails to lift the nation’s federal borrowing limit by October 17. According to a new report just released by the U.S. Treasury Department, the economic damage could be untold:

“The United States has never defaulted on its obligations, and the U.S. dollar and Treasury securities are at the center of the international financial system… A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”

Those are not particularly comforting words coming from the man who holds America’s purse strings.

President Obama is also making good political use of the government shutdown by refusing to let a good crisis go to waste. In a speech in Maryland this week, Obama no doubt spooked senior citizens saying:

“In a government shutdown, Social Security checks still go out on time. In an economic shutdown — if we don’t raise the debt ceiling — they don’t go out on time. In a government shutdown, disability benefits still arrive on time. In an economic shutdown, they don’t.”

The pressure is mounting on Washington to resolve the government shutdown and avoid a default. The question is: Which party will cave to the pressure first?

The big money is apparently not waiting for the answer as banks are preparing for a “sudden panic among their customers” by stockpiling extra cash in their ATMs.

Meanwhile, billionaire investor Jim Rogers is warning fellow investors:

“This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity. Well, the artificial sea is going to disappear someday, and when it does, the catastrophe will be even worse. Yes, it’s coming.”

However, Rogers immediately tempered his warning with sound advice:

“I don’t see any reason to rush out and sell stocks now, because of these artificial currents which are taking place… I’m not buying U.S. shares at the moment, but I’m not shorting either, because I am concerned this may turn into a huge bubble. So I’m sitting and watching.”

I agree with Rogers. The FTM Market Barometer is not flashing a dire warning signal… yet. However, when it does, our FTM Insiders will be alerted in real-time via email.

Jerry’s Comments: I like big oil stocks and Chevron (Ticker: CVX) has long been one of my favorite plays on the sector. The company is sitting atop a huge pile of cash and has valuable assets all over the world. It currently pays a healthy 3.3% dividend. Since the beginning of 2011, I have viewed every dip below $100 as an immediate buying opportunity for CVX. In today’s chart, notice that Chevron’s nearly one year bullish uptrend is showing signs of failure. However, the stock may be due for a bounce in the near-term as it is nearing oversold territory. Additionally, the stock has officially entered the buy zone on our stochastic settings. To use the stochastic buy signal, we would simply purchase the stock once the black line fully emerges above the green “buy zone.” Note: We will have a full report on our favorite energy stocks in our upcoming issue of FTMQuarterly due out later this month.

 
Keep your heads up and eyes open friends.

Until Monday,

Jerry Robinson
FTMDaily.com
Founder & Editor

DISCLAIMER: The above trading ideas are from my own personal stock watchlist and are for educational and informational purposes only. They are NOT specific buy recommendations. Trading stocks is risky and you could lose all of your money. Trade at your own risk. Jerry Robinson is not an investment advisor. You should always consult a trusted financial services professional before making any financial or investment decisions. READ FULL DISCLAIMER.

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