US House Rejects the Bailout Bill: A Great Victory For the US Investor

I’m of the opinion that the government never gets anything right, well they proved me wrong today.
The Paulson bailout bill needed 218 votes for passage, but luckily it came up 13 votes short: the final vote was 205 to 228 against. Two thirds of Democrats and one third of Republicans voted for the measure.

This $700 billion financial bailout plan would have been worse than the problem it’s trying to fix. As Peter Schiff repeatedly says, we have got to let this problem run it’s course, we cannot keep prolonging the badness.

The markets reacted violently, of course. The Dow Jones industrial average is down almost 800 points – nearly 8% off the close Friday. The 777-point decline for the day surpassed the 684-point drop on the first trading day after the Sept. 11, 2001, terror attacks. But Common Sense investors should view this as fantastic news, news that our government isn’t as inept as previously thought.

What to do now?

Right now, I’d reiterate my previous advice, and the advice of Peter Schiff: “Get out of Dodge”. As an investor, you should keep your holdings away from the US dollar. Invest in things like gold, European stocks, Singapore currency and stocks, other Asian stocks; that’s the only way you’re going to be able to preserve your wealth as the dollar continues to decline, which it will. If you’re not willing to completely avoid US stocks, then at the very least diversify your portfolio with more gold and more non-dollar based securities.