What Can't Go On, Won't

Watching this administration pretend that refusing to raise the debt ceiling is the federal government’s real problem — rather than its spending — is simply surreal.

All the major players pushing for more debt, including the president, said exactly the opposite just a few years ago. Roughly, about the time The Daily Reckoning was filming and releasing I.O.U.S.A. Back then, the current powers-that-be were criticizing the prior administration, and rightly so, when the debt was $10 trillion.

Ha. Seems laughably trite, doesn’t it?

Now, when the debt is 60% higher, the same characters are feigning outrage that anybody would take their own prior position in support of a balanced budget.

There is upside to this behavior. Certainty.

We know certain big things will happen. Whenever you know that something big is going to happen, you can make money. And that’s, after all, why you read these pages… to learn how the government and economy actually work, then plan accordingly.

We can project what’s going to happen as a result of current and past fiscal foolishness. As Herbert Stein said, “what can’t go on, won’t.” Attempts to raise taxes further will lead to lower, not greater, revenues. The cost of borrowing will go up, curtailing debt growth and forcing spending cuts.

A primary justification used by this administration for increasing spending and debt has been the expansion of health care programs. The promise of lowering health care costs has already been exposed as a pipe dream, but it has done nothing to diminish the administration’s support of these programs.

In fact, health care costs are going to go up for several reasons, including the bureaucratic burden. Additionally, people are going to live longer while more and better therapies become available. Political pressures to reduce healthcare costs will be enormous.

We’re not speculating wildly, incidentally. Costs are already exploding in places where government established national health care systems earlier, including Canada and the U.K. Rationing, known in medical circles as triage, is reality.

Information is power. If you understand this trend, you can leverage that knowledge, reducing regulatory risk and maximizing ROI by investing in emerging biotechnologies that improve and lower the costs of current medical practices. If a biotechnology does something universally accepted as necessary but does it better and for less money, you have an almost certain blockbuster.

I’ve recommended one such technology to subscribers of my Breakthrough Technology Alert. The company behind this technology has improved continual glucose monitoring with an electronically controlled device that painlessly removes the top layer of dead skin cells, the stratum corneum.

Then, a needle-free sensor measures blood sugar levels in the capillary-rich epidermis and sends that information in real-time to whatever device you choose. Instead of paying nurses to repeatedly draw blood for testing, a constant flow of information is gathered, stored and electronically displayed, eliminating human error for any reading that for some reason is out of line with actual metabolic trends.

Several studies say that continual glucose monitoring can improve hospital outcomes, mortality and length of stay by a third. Cutting hospital stays by a third in a system that pays fixed fees for specific conditions yields huge financial benefits for hospitals. It also saves hours of nursing work every day for every patient having sugars monitored.

This looks to be a breakthrough year for this tiny company, with multiple trigger events coming up soon.

Regards,

Patrick Cox
for The Daily Reckoning

The Daily Reckoning