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With relatively little fanfare in the media, the US national debt cruised above $13 trillion last month. The federal budget deficit for fiscal 2010 is projected to reach a record $1.5 trillion by September 30, and will be above $1 trillion in fiscal 2011 as well. President Obama's own budget projections show that our national debt will swell by almost $10 trillion more over the next 10 years.

This out-of-control spending has caused both the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) to formally call for the Obama administration to curb its budget deficits. In response, President Obama has created a 'Debt Commission' to study ways to reduce the deficits. Don't be surprised if this commission concludes that the only way to fix the problem is a 'Value-Added Tax' (VAT).

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Last Wednesday, President Obama announced the most sweeping financial industry reforms since the Securities and Exchange Commission was created in 1934. Obama unveiled new proposals that would refashion the federal rules governing almost every corner of finance, and will push the government and the Federal Reserve much more deeply into banks and the private markets. I will discuss these massive changes and tell you why I do not believe they will be good for the markets or investors, for the most part. We will also look at some new polls which indicate that more Americans are worried about President Obama's trillion dollar deficits than they are about the recession. Lastly, we will look at the latest economic numbers and what they mean. Let's jump right in....

While the global recession and credit crisis are still in full swing, at least we have finally seen a few positive economic reports of late. Specifically, we have seen some good news in the housing sector where new and existing home sales actually increased nicely in February, following months and months of decline. We also saw an unexpected jump in durable goods orders for last month. These reports, along with the nice jump in the stock markets, have led several noted forecasters to suggest that we've seen the bottom in the recession and the worst of the credit crisis. I am not so convinced.

We will also take a close look at Treasury Secretary Geithner's latest bank bailout plan that would partner government and private investors in a scheme to take toxic assets off of the banks' books, but there is no guarantee that this new plan will work. We'll also examine the Fed's latest plans to buy Treasury debt and more toxic assets from banks. Next, we'll examine the latest report from the Congressional Budget Office regarding President Obama's record large budget for 2010, which the CBO says will result in a massive $2.3 trillion deficit. Can I say, I told you so?

It's a lot to cover in one letter, but I trust you will find it interesting....

President Obama will sign into law the largest single spending bill un US history, $787 billion, today in Denver. No one knows if it will work. Last Tuesday, Treasury Secretary Tim Geithner announced a massive bank bailout plan that will spend $1.5-$2 trillion or more, but he failed to provide many details on how this rescue package will work. The stock markets have been in a tailspin ever since. There is growing talk of nationalizing many of our large banks. While I'm against nationalization, I have included a very interesting article by Dr. Nouriel Roubini, a well-known economist. I think you should read it, if for no other reason than to be informed on the subject....