Warning for US Credit Rating; Don't Take it Lightly

One of the key credit rating agencies, S&P, issued a warning today to the US government. For the first time, Standard & Poor's lowered its long-term outlook for the federal government's fiscal health from "stable" to "negative". This is very consistent with what Bill Gross, the bond king, has warned about the US debt load status. The market seemed to be caught up by a surprise and all of them plummeted heavily today. Is it really something surprising? Not at all. I really don't understand where all the euphoria has come from in the market that everyone seems very upbeat for the US economy. On the contrary, the US is moving toward a very wrong direction and there is almost no return by now with the fast deteriorating debt problem. Sooner or later, the US will collapse due to its extremely heavy burden of the debt load. The US is just following the footsteps of Greece!! So, don't take today's warning lightly and plan your personal finance accordingly. Over the long term, US$ is just like toilet paper. If you rely your wealth on it, good luck with you but you will be crying for sure eventually. Invest in hard assets like precious metals, oil, agriculture etc. Of course, I don't mean you jump in now with all your money. No but you should be prepared to get in whenever there is an opportunity.

Very ironically, over the short-term in the next few months, I think you should be very bullish for the US$. Even among toilet papers there are better ones and worse ones. People have come to the stupid extreme regarding the US$ and have beat it down too much in the past few months. It is now the turn for it to go up. For me, Euro is much worse than US$, which should not even exist with its current format. The amazing upbeat for the Euro lately has created a great opportunity to short the Euro and long the US$. So I'm buying EUO (to short the Euro) and also UUP (to long the US$). I'm confident both will turn out to be good buys now.