Make no mistake, Tuesday’s signing is on purpose
Obama was clear in his efforts to get the stimulus package through government as quickly as possible. He warned that economic collapse would happen if the stimulus was not voted through Congress for his signature immediately. But now that it has passed (Friday) the bill will be not be signed until Tuesday and there is one clear reason for it
The market are closed on Monday for President’s day in the United States. While the markets are closed on Monday in the United States the stock markets worldwide are still open. This comes as Japan is declaring its quickly deteriorating economy.
Japan’s economy saw declines of 3.3% in the second quarter, annualized that works out to an astonishing 12.7%. Those kind of declines are hardy recessionary, think depression.
Obama has to keep the markets calm on Tuesday. Between the derivatives market and failing stock markets there is little room for error. Though we have been and will continue to be in a deleveraging environment it is important that the system does not receive a fatal blow.
To keep the markets in order Obama has to sign the stimulus on Tuesday rather than on Friday when the weekend would have wiped away any positive feelings coming from the stimulus package.
The gold and silver markets have not been quiet with the stimulus looming. Both gold and silver have sustained very strong rallies going into the signing of the stimulus and should be expected to continue upward as investors worry about financials and problems associated with stagflation.
The market’s confidence is the most important factor to maintaining a healthy stock market. Opinions are thick, everyone has one, now we’ll have to see which side of the fence prevails.
