The world has been in chaos the past while as its most prestigious financial institutions have been closing their doors. Big time investment firms that chased big time profits through the fire have finally gotten burned through the subprime mortgage meltdown and Uncle Sam has had to bail them out. The world economy has gone into a real tailspin for the first time since the Great Depression and the U.S government is looking to give financial markets 700 billion dollars for a bail out.

A 110 page bill to slow down the credit problem in the states has been put forth by Congress on Sunday to save the world economy. Few details have been released about the bill but both Democrats and Republicans have agreed that something needs to be done; although this needs to get done, is this the right thing to do? Is 700 billion dollars enough to save the economy? Throwing money at a problem and hoping it goes away could be the last thing we need, but it is the only thing anyone has come up with. No “Plan B’s” have been heard from economists and financial experts, but what I personally think is that this is going to make a difference. Lucky President Bush is going to walk away from this mess in November leaving a legacy of dark financial gloom for the next guy whether it be Obama or McCain.

“This plan sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system”-Bush

Everytime I hear him speak about the economy it makes me a little weak in the knees. I hate to be the guy screaming bloody murder but I’m not sure that we are going to see a big turn around in the economy from this 700 billion dollars. I think the U.S is in for a longer haul and with this band-aid approach we could see the market and the dollar pay for it longer than we think. Resource ETF’s, although not taxed as great as stocks, make an excellent addition to a recession proof portfolio and I wouldn’t mind some gold in the next while. I’m not sure if we will see a shift into lower P/E companies that are paying higher dividends through this mess, especially if Obama wins the presidential election and raises the dividend tax. The number one thing I want in my portfolio right now is cash! Cash is King! I can always wait for those gems and in this falling market nobody wants to catch a falling knife.

Kelly Parks
www.wealthforinvestors.com