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  • Fed Offers Bailout of European Banks

    Last Thursday we learned that the US Federal Reserve has decided to make unlimited US dollar loans (swaps) to the European Central Bank (ECB) and directly to European money center banks that are in trouble, at least through the end of this year. And what will the Fed get in return as collateral? Eurodollars that are quickly falling in value as of late. So even as our own economy may be falling back into recession, the Fed sees fit to bail out the European banks that are sinking in sovereign debt from the likes of Greece, Ireland and Portugal.

    All eyes are on tomorrow's Fed Open Market Committee policy statement. The Fed is expected to announce its so-called "Operation Twist" strategy that is intended to lower medium and long-term interest rates, which may or may not work. Some people expect the Fed to comment on its latest decision to make unlimited US dollar loans to European banks, but I will be very surprised if they mention a word about it. They're keeping it very quiet (which is another good reason to read my E-Letters and blog postings).

    Speaking of blog postings, I will write about tomorrow's Fed policy decision on my blog before the end of the day tomorrow. Go to www.GaryDHalbert.com and subscribe to read my take on the Fed's announcement.

    Following the Fed discussion, I will bring you the highlights of the latest report on US poverty from the Census Bureau. Poverty is now at an all-time high. Ditto for the number of Americans that depend on food stamps, according to the Department of Agriculture. These two reports are very troubling.

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  • Why Greece Matters to You and Me

    The sovereign debt crisis in Greece is rapidly spreading to much of the rest of Europe. In addition to Greece, Portugal, Spain and Ireland, Italy is now in question. Italy has the third largest bond market on earth behind the US and Japan. Today I bring you a sobering assessment of the European debt crisis from our old friends at Stratfor.com, which is one of the most alarming analyses I have ever read from them. I also bring you an even more alarming evaluation from GaveKal Research, a leading forecaster based in Hong Kong.

    The bottom line is that another global financial crisis may be just around the corner, in weeks or months, and I believe this could spark the next major bear market in the US and global stock markets. I suggest you read today's E-Letter very carefully and begin to think about what you need to do to protect your investment portfolio and your retirement nestegg. Time may be very short as events in Europe are unfolding very rapidly, and no one knows for sure what will happen next. This may be one of the most timely E-Letters I have ever written.

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