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The announcement on October 29 that 3Q GDP surged 3.5% was seen as a confirmation that the recession is over. However, a closer examination of that report reveals that it was still a disappointing quarter for the economy, especially considering how much government spending contributed to the gain... The government reported last week that US worker productivity surged to the highest level in six years in the 3Q. Normally rising productivity is a good thing but this time, much of the increase is due to massive layoffs -- fewer workers are having to do more work -- and many companies are laying off the best and brightest, such as scientists and engineers... The unemployment rate surged to 10.2% in October, the worst in a quarter century.

This week, we will examine all these issues at length, plus I have included a very worrisome analysis from economic forecaster Nouriel Roubini regarding the US dollar and what he sees as the next credit crisis on the horizon. Finally, I have included an article from the Wall Street Journal that lists the most insidious parts of the new healthcare bill that just passed - prepare to get very angry!

Finally, our thoughts and prayers go out to all of the families of the innocent soldiers who were killed and injured in the tragedy at Fort Hood that occurred on November 5.

The US dollar has been in a multi-year decline since peaking in 2001. While there was a temporary 'rush to safety' rebound in the dollar due to the global credit crisis in 2008, the dollar has resumed its long-term downtrend as of early March of this year. Now, more and more forecasters are suggesting that the dollar may lose its global "reserve currency" status if it continues to decline. Some are even calling for the establishment of an all-new global currency to replace the dollar entirely.

This week, we will explore how the US dollar came to become the world's reserve currency and how difficult it would be to replace the dollar as the reserve currency, or replace it entirely with a new global currency. We will look at the major price trends in the dollar over the years and try to put the current decline into perspective. I will make the case that the US dollar will remain the global reserve currency for at least several more years. It should make for an interesting letter, so let's get started.

This week, we take a fresh look at the latest economic reports, most of which have been positive and suggest that the recession is over and the economy is rebounding. Still, I expect that economic growth will only be mild in 2010, as I discuss in this week's letter.

Our larger topic this week is the huge problem with commercial real estate debt, which could be the next shoe to drop in the credit crisis. Commercial real estate values have plunged apprx. 39% nationwide since the recession began, and some sources believe prices could fall another 20% or so before stabilizing. This is huge, but we don't hear a lot about it, even though banks are failing at an alarming rate as a result. This is a major problem you need to be aware of, so let's get right to it.

High-yield bonds, otherwise known as 'junk bonds,' have enjoyed spectacular gains so far in 2009. Both the Barclays and Merrill Lynch high-yield bond indexes are up over 40% year-to-date as of August 31st, and inflows to high-yield bond mutual funds is at or near record levels. What these investors may not know, however, is that high-yield bonds, besides having a higher risk of default, also have a higher correlation with equity markets than other types of bond investments. As a result, high-yield bond investments can be very volatile.

Fortunately, there is a way to invest in high-yield bond mutual funds within an active management strategy that can go to cash when the high-yield bond market turns negative. This week, I'm going to feature a whitepaper on high-yield bond investing by Steven D. Landis, CFP, co-founder of Sojourn Financial Strategies, LLC. Steve's paper will not only provide some valuable background on high-yield bonds, but will also discuss why an actively managed high-yield bond program may still be a good investment in 2009. After that, I'll discuss Sojourn's Columbus High-Yield Bond Program that Steve manages. I think you'll find this program to be a viable way to introduce additional diversification into your investment portfolio.

The Internet is a wonderful thing, but it can also be very frustrating when there is a case of mistaken identity. I have written a number of times about another 'Gary Halbert' that appears when readers do a web search on just my first and last names. And even though Gary C. Halbert died two years ago, he still has a very prominent presence on the Internet. So prominent, in fact, that I don't appear on most searches until somewhere on the second page of links.

If that's not bad enough, Gary C. Halbert has a number of very unflattering posts related to his activities when he was living. Whether these are accurate or not, they create a problem for me if my current or prospective readers or clients were to think these negative posts are about me. This week, I'm going to again discuss why it's always important to use my middle initial "D" when you do a web search on my name. I'll also provide some background information on myself and my company so that you can feel more comfortable with the person writing to you each week.

Target-date funds have been touted as an excellent alternative for 401(k) plan participants who either can't or won't do the work necessary to build their own retirement portfolios. These funds offer a one-stop shopping approach by offering an automatic asset allocation scheme within the fund that is based on a future retirement date. However, like most one-size-fits all solutions, these funds have some serious drawbacks. In fact, some of these funds did so poorly in 2008 that government regulators are now considering special allocation and disclosure rules. This week, Mike Posey will fill us in on the pros and cons of target-date funds and why they may not always be the best alternative for investors.

We will touch several bases in this week's E-Letter. First, we take a close look at the latest economic data which has a few 'green shoots' but remains mostly negative, and further supports my view that we will not be out of this recession for some time to come. Second, I share my thoughts on why a second major stimulus package is not a good idea, and my thoughts on what the government should do instead. And finally, I share with you the best article I've seen on why the official monthly government 'unemployment rate' report is so under-stated. It all should make for interesting reading.