What's Up With The Economy, The Deficit...

That is a really good question, "What's Up With the Economy?"!  The best analogy is the economy is sorta like a really nice business train that is slowly chugging along and starting to lose passengers at each stop.  I think this is an accurate picture because the data is definitely mixed, showing corporate businesses are doing quite well and chugging along, like the train.  The passengers being lost at each stop are comparable to middle-class Americans that are being negatively impacted by: 1) high gas & food prices, 2) declining housing prices, 3) still high unemployment numbers.  And the biggest problem is JOBS, JOBS, JOBS, or the lack thereof.  Jobs are so critical because they give Americans confidence that the economy is getting better when they see their neighbors getting up and going to work, coming home with bags of groceries, and investing in their homes.  So who is focusing on getting more Americans jobs? That's the question that needs to be asked of everyone from the president and his administration, to your senators, then your local congressmen, and also of the companies that are doing well.  Every moment should be spent on turning the dismal job scenario around and we've seen our politicians come up with some solutions but not nearly enough.  The formula is not that difficult as it usually comes down to stimulating Americans and stimulating the companies who are tasked with hiring more Americans.  Its a shame the debate in Washington is whittled down to spending versus tax cuts, but that has been the case.  Last time I checked both scenarios cost taxpayers money but are needed to bring this economy back to life.

What does this have to do with the DEFICIT??  In my opinion, there is very little connection between the economy and the deficit.  All this talk about deficits is a distraction in Washington and it shows that Congress has a difficult time separating short term needs which is to continue to stimulate the economy through job creation and then their long term goals of deficit reduction. Some argue that because Congress is doing nothing, that the Federal Reserve should actually do more (because one of their mandates is to help improve jobs).  However, there have been a lot of complaints about the Fed and they are now in an unlikely position to try to do more to stimulate the economy.

This is very very important because when I invest I have to think of risks, and the bigger risk may be the economy spiraling back down! We all need to wake up, and people need to start focusing on JOBS.  The jobs number came out first thing this morning and they were very disappointing!  I've been writing for the last few months that my personal portfolio is comprised of cautiously optimistic stocks, other may call them defensive.  I want to hold stocks that will benefit even when the economy is not doing well. Please read through the older posts but they have included stocks in these sectors: Commodities (Oil, Gas, Gold,), Dividend, Technology, and Emerging Markets.  Whatever policies you may believe, we can all agree it is important that Americans get back on their feet and get back to work. And I think whoever begins to HIRE Americans should be CELEBRATED whether it is the government or if it is the corporation down the street.  Until this happens, I can't in full faith tell you to start buying stocks indiscriminately.  Stay tuned