Government policy is hurting the economic recovery.

In the face of protracted high unemployment and prospects of a double-dip recession, the Fed officially acknowledged the economic slowdown and announced a willingness to buy more government securities and expand the money supply, if necessary.

Where to invest now? I still believe that the majority of your funds should be in income-producing investments.

Something interesting has been occurring with Annaly Capital Management.

High Income Goes Higher

Commodity prices fell last month in line with the global slowdown. Gold fell below $1,200 an ounce, and silver dropped below $18 an ounce.

I’ve written a new pamphlet on sound money called "A Tale of Two Dollars." Most Americans don’t know it, but the United States government mints two different kinds of legal-tender dollars, a paper dollar and a silver dollar.

Actions to Take This Month

With gold hitting new highs, and most of our high-income investments gaining strength, our well-diversified portfolio is beating the market with less risk.

So let’s talk about the stock market. Global stocks rallied a bit from their sell-off in May, while gold hit new highs.

China announced that it will allow its currency, the yuan, to appreciate against the dollar.

Most of our high-income stocks and funds are holding up well, with one exception:

Are you as worried as I am about the push for higher taxes in an attempt to find new sources of revenue?

As an investment writer on gold and Wall Street since the early 1970s, I’ve watched with deep concern last month’s vocal spat between Congressman Anthony Weiner (D-NY) and popular Fox News host Glenn Beck over the issue of gold as an investment.

Hayek’s Road to Serfdom makes #1 on Amazon

Actions to Take This Month

The threat of higher taxes, more government intervention, and another business slowdown have created a bear market and, hopefully, new bargain opportunities for our favorite stocks, high-income investments and commodity plays.

The Minneapolis Fed recently released a series of graphs comparing the performance of the U.S. economy (output and employment) during all the boom-bust cycles since World War II. The most striking case is the recovery of the early 1980s under Reagan versus the most recent recovery under Obama.

The mortgage REIT, fell sharply last month, and its historically high dividend didn't erase those losses.

Last month, Fed chairman Ben Bernanke reported to Congress that "inflation is not a problem right now," and he turned out to be right.