Mr. President, may I present a Simple Economic Recovery Plan that will work?

We may, from now on, refer it to as SERP.

Mr. President, your advisors are focused on rescuing the banks and risk insurers. They assume that by solving the issue of solvency and credit crunch at the financial institutions, they will be able to restart the credit flow. In order to get the credit flowing, the Federal Reserve and the Treasury are injecting liquidity by hundreds of billions. Over the next few years Trillions of dollars will be injected to jump start the economy.

They seems to be looking in the wrong direction.

Our present liquidity crisis started with the bottleneck that occurred in the REPOs market during the second half of 2008. REPO market failure was the direct result of letting the non-treasury securities and their derivatives swap in that market. That REPO Fail triggered the avalanche in the $ 600+ trillion derivative market. This amount is beyond any logical comprehension. The global financial system is tanking under this heavy weight.

Mr. President Obama, you are the smartest and most intelligent President that this country has seen since1980. You sure are capable of analyzing and understanding issues presented to you. The key word is, of course, "presented".

A nation's real economy is comprised of the goods and services that are produced by it. The same definition applies to the global economy. The economy and the financial markets are not necessarily at the same tangent all the times. Disconnect does occur and, gets taken care of over a period of time.

What we are facing now is the dismemberment of the entire economic system that is the direct result of greed, manipulation and irresponsible behavior of the financial sector.By injecting billions and trillions of dollars to revitalize the financial market while still neglecting the real economy we are rewarding these bad boys for their disgusting behavior.

By following the policy of keeping on sinking the money in rescuing the financial institutions, we are creating a more serious problem which will have no solution at all. Continuation of these policies is going to flood the world with trillions of newly created US dollars - This will devastate the economy in such a way that their will be no recovery possible for the nation.

Despite the public announcements by the Chinese and Japanese central bank official, it is well understood that Treasury Bond offers will not be well received - We have seen it at the recent UK Gilt offering. The only option open to the Federal Reserve and the Treasury is to monetize the debts and keep on creating money.

As the first consequence of this strategy, US dollar's status as the world's reserve currency will be threatened by this massive debt monetization.

Mr. President, the US money supply, as measured by cash in circulation and demand deposits, is currently about $1.4 trillion. If this year's budget deficit alone is monetized, the money supply will double. It is obvious that the inflation would explode. The combination of high unemployment and high inflation would be devastating to already suffering Americans.

Further, thanks to offshoring and dismantling of our manufacturing base, the US has become an import-dependent economy. We rely on imports for almost every thing - from clothes and shoes to advanced technology products. If the US dollar loses its global reserve currency status, the US will not be able to sustain its import of goods. The disaster of inflation, shortages and massive unemployment will make the present crisis look like the sweet memories of the past.

US dollars value is in the public perception and global acceptance. Dollar's acceptance is already eroding globally. Once fallen from its pedestal, the depreciation in dollar's value will become a vicious cycle. The result will be utter poverty for the inhabitants of this country - Poverty that the people have not known for centuries.

There are better ways to come out at the top with out taking the risk of falling in a deeper hole.

Mr. President, The real solutions that do work are simple - They are elegant in their simplicity - And they do solve the problem at hand. Let me present the Simple Economic Recover Plan, SERP that will lead us to the recovery path and revitalize our economy.

SERP - The Simple Steps:

Step One -

Wipe the slate clean of the Derivative contracts - liabilities, values and the market.

It is pure madness. The amount of outstanding derivatives worldwide is estimated to be around $1,200 Trillion. The US derivative market alone is around $650 Trillion. There is no way and no solution to resolve this mountain of obnoxious greed. This chapter has to be closed.

Step Two -

Nationalize the Federal Reserve, The banking system and the Insurers. It will allow the government to reform the entire financial market and create money without having to accumulate a massive public debt.

Step Three -

The US needs to focus on saving the dollar as the world's reserve currency. We need to reduce US Budget and trade deficits. This step is more essential than winning all the wars in the world.

To accomplish these goals, we need to shrink back to insure our national integrity, safety and security within our own borders. We need to close down most of our foreign military bases and bring our troops back home. The military budget needs to be trimmed down drastically to conform with the economic dictates of the present time.

Step Four -

The problem of the defaulting mortgage loans has to be tackled at its roots. The $75 billion Home Affordable Refinance Program is not enough to solve the Real Estate crisis. It leaves those who most need the help out of the program. We need to mimic the FDR's approach.

Apply straight across the board Mark-to Market approach and inject help directly to the home owners and prospective buyers. Please review the plan in its entirety as I presented it in my previous article Crisis & Solutions. Millions of American families who are currently under the foreclosure proceedings will not end up on the street. Allowing the families whose home have already been foreclosed to re-enter their homes as renters will be good for both the real estate market and the banks.

Step Five -

Mr. President, take the steps to revitalize the Manufacturing and the Industry. Already assigned $ 2.3 trillions for the banking sector should be reallocated to revitalize our manufacturing and industry base.

These trillions of dollars can put new life to our real economy. Initiate projects like the High Speed coast-to-coast Trains connecting all the major cities. Modernize the national infrastructure. Initiate policies and provide funding to restart consumer electronics and appliances manufacturing in the US. Provide easy funding for new High-Tech startups.

Industrial and renewable and alternative energy sector needs huge injection of funds. Ford, General Moore and Chrysler are not only the automakers; they have been the backbone of our industrial revolution. Of course, their current management needs to be booted. These giants must be retooled and modernized to take the lead in technological innovations and compete in the world.

The investments and attention to revitalize our manufacturing and industry will create millions of decent jobs at all skill levels. The unemployment problem will be solved and US will emerge as the leading industrial nation again.

Step Six -

Mr. President, we need to curb the policies that have encouraged offshoring our manufacturing, industrial and high-tech jobs. It is time for the reversal. The government has at its disposal the power and the incentives to bring the manufacturing back to home - It is time to exercise those powers.

Step Seven -

We have to take the education seriously. Playing ball for the fun is great but the schools must be reserved for educating the young generation in the field of Math, Science, and Technology. We have to promote a culture that glorifies its scientists and technocrats to inspire our youngsters.

These are the simple steps to real economic recovery - The elegance in simplicity! With simple and straightforward steps you have the power to lead the nation out of this crisis.

Mr. President Obama, you have this opportunity to bring in an everlasting and positive change that will ensure your place as one of the greatest Presidents that this country ever had.

Mr. President, I thank you very much for reading through my SimpleEconomicRecoverP and wish you all the best in your endeavor.