Last week, I posted the video of CNBC reporter Rick Santelli railing against the Obama administration’s $75 billion to help struggling homeowners. His call for a new Tea Party struck a raw nerve and was carried on virtually every major network. It was so serious that White House has been trying to do damage control.
Geithner and Obama need to reveal the details as soon as possible. If not, criticism will continue to mount and cause even more uncertainty that will spook the markets.
You can see how nervous investors are by looking at the gold pits. Gold rallied to over $1,000 per ounce as nervous investors sought a safe haven. Other precious metals, such as silver and platinum, are also on the rise. I suspect that the price of other commodities will rally especially if the dollar weakens. In fact, China signaled last week that it is looking at ways to use its $2 trillion of foreign-exchange reserves to help companies make investments abroad, which would further accelerate its push into acquiring natural resources.