It's been some time since my last article on the economic and financial meltdown that grips the world economy. Here is some of my observations.

Amazingly, the U.S. Government still continues to spend like a drunken sailor. Guaranteeing every company, while letting so many villains off the hook. Using the term "Too big to fail" like it was a household phrase. Believing that taxpayers will never figure out they are being played for fools.

A report carried by Bloomberg today states that the U.S. Government has either spent or guaranteed an astounding $7.7 trillion so far, with trillions more to come. So much for the national debt. Like an addict addicted to speed, U.S. Regulators appear to be throwing money at various problems without even knowing the consequences. Taxpayers have lost confidence and no longer have faith in the financial markets.

For some mysterious reason some of the smartest finance and economic brains in the world appear to be so disconnected from reality they can't see that people are in serious debt with little capacity to borrrow even if they wanted to. As I have said over and over again, we are in a de-leveraging of the financial system of a massive scale. No amount of money can prevent it from happening.

Like I have stated previously, continually attempting to re-inflate the credit bubble just won't work this time, and it hasn't. No amount of tax cut or stimulus will work. Unemployment will continue to rise above all estimates. Interest rates will fall. The Federal Reserve Open Market Committee willl cut the famous discount rate to 0%. That's right 0%! But, it won't have any effect. Consumers will continue to pull back on spending because of fearing of being unemployed. The fall in gas prices alone equals a stimulus of some $250 billion plus.

The "Big Three" auto makers are "too big to fail" but need to file for Chapter 11 bankruptcy in order to become lean, but they won't.

Housing prices will fall and distress sales will rise significantly more. Look for Bank of America to fail. Whoops! I mean get rescued.

I have spent the last month watching the major business channels, listening to all the talking heads say amazing things like "Stocks are cheap.", "We are at the bottom.", and "There's value in the market." But, the tone is of a prayer. The fact is, we are in uncharted territory and the people making these statements in reality have no clue. They have only hope and a prayer. I feel sorry for the people taking this advice because they undoubtedly have lost even more money.

Stocks are not cheap for one simple reason. The forward earnings of most companies are in doubt. More and more companies are suffering from dramatically reduced earnings, or ever increasing losses. Their stocks in many cases, worthless. Once financially sound companies now devastated.

Government has let its people down. What an understatement.