monitor the dollar index ($USD) every time you see it downtick, that’s a sure gain for gold, silver, and comodities in general. it’s also a positive sign for stocks in general but as I’ve stated in my post, when bull run ends those companies who have solid cashflows and low debt will retain their stock values and the “pretenders” (stocks that went up just because they got caught up in the short term euphoria of a market rally).

monitor the Volatility index ($VIX). when it goes down, the stock market indices go up.

first, don’t take my post as an investment advice (gotta do the disclaimer thing first LOL!)

precious metals is always a good headge during currency weakness. the dollar is still headed for a decline and when that happens precious metals always gain strength. don’t invest in those precious metals ETF, there are anomalies hidden within their accounting books were serial numbers of bars are listed in duplicate – means that those ETFs are not using all of their investors money to gain physical possession of silver or gold bars. insist on physical delivery of gold and silver bars.

rentable real estate (non-commercial or non-retail space) can be good investments, provided you can ensure that all of your tenants are gainfully employed – not much assurance on that though. if you want to get into rental apartments make sure that you’re not too leveraged on it and have a couple years of operational expenses on hand.

I don’t like the Euro. it may look strong compared to the dollar, but they are doing the same thing that the US is doing, printing more Euros and taking over banks. European banks have a lot of exposure to derivatives as well, when derivatives blow, their banks will be collateral damage as well.

when currency values fall, inflation increases, when inflation increases, comodities go up. Look at what China has been doing for the past 8 months – they have been buying comodities. they are hedging their bets. they hold huge amount of US debt instruments and in order to be safe from a dollar collapse they bought and are still buying comodities. China had also set aside $2B for US real estate. when they start buying, you’ll be able to see the end of the real estate meltdown in a few months.

stay away from stock that are heavily leveraged. that means many of the financial and real estate companies. mining stocks are good (comodities), agricultural stocks are good (again comodities), oil, natural gas, energy, and biotechs.

only two trends are happening right now, first the dollar is in a decline, although it may bounce up a few times but it has been in a downtrend since March. when the dollar falls, comodities rise as inflation rises (although the government has been fooling everyone with their low CPI numbers. stocks go up when the dollar falls (as we’ve witnessed since March) but eventually only companies with solid cashflows will retain their values. since unemployment is still a problem, sale would always be sluggish, retail companies are still on shaky ground, same with service companies. comodity producers on the other hand have an advantage since their products prices just keeps going up with minimal increase in production cost (what they produce a few months ago already went up in price with little increase in production costs) that’s real profit.

I like biotechs only because we are now experiencing global pandemic threats from bird flu to swine flu. there are shortages in vaccines and medicine in general.

again, the trend is dollar decline and increasing inflation. comodities will do good, resellers/retailers/servicers/financials not so good.

these are what I think are good right now. again, please consult with a financial advisor and take my words with a grain of salt.

you all should read about the derivatives market that will unravel when the commercial real estate market finally melts down.

the commercial real estate market meldown is just the tip of the iceberg. the derivatives that fueled the real estate bubble is worth over $500 TRILLION dollars and will bankrupt every large financial company that created and traded those derivatives. these are what Warren Buffett called “weapons of Mass Destruction.”

if Obama does a bailout of the derivatives market, our currency is done for.

the large leveraged purchases that occured during the commercial real estate boom is what fueled the real estate derivatives market that is over 500 Trillion dollars and derivatives fueled the real estate market bubble at the same time. it was a vicious cycle that turned into a bubble that is now going to burst.

the derivatives market is the real mother of all bombs that will unwind when the commercial real estate market finally starts its inevitable meltdown.

I say let the bubble finally burst and deflate. there should be no government intervention or bailouts (Goldman Sachs, JP Morgan, AIG, and just about every financial company out there is neck deep in a derivatives market that has no government regulation). since the derivatives market is not controlled by any government regulatoray body, there should not be any taxpayer money used to save any idiot or any company that invested in it.

the time for bailouts should end and the people who enabled this bubble should pay the price by losing their money in a market that was fueled by their greed….but who’d want to bet that Obama will do some sort of bailout for this idiotic derivatives market? this will be used as an excuse to inflate the deficit again and to print more dollars. “too big to fail” will be an ongoing mantra for years to come and the taxpayers will be taken to the woodshed over and over again.

Below is a 2008 article that describes the danger of the direvatives market.

http://www.independent.co.uk/news/business/news/a-163516-trillion-derivatives-timebomb-958699.html

Not for nothing did US billionaire Warren Buffett call them the real ‘weapons of mass destruction’

The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world’s output: it’s been called the “ticking time-bomb”.

It’s a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it’s a market that is set to come to a crashing halt – the Great Unwind has begun….

The complex and opaque derivatives markets in which these hedge funds played has been dubbed the world’s biggest black hole because they operate outside of the grasp of governments, tax inspectors and regulators. They operate in a parallel, shadow world to the rest of the banking system. They are private contracts between two companies or institutions which can’t be controlled or properly assessed. In themselves derivative contracts are not dangerous, but if one of them should go wrong – the bad 2 per cent as it’s been called – then it is the domino effect which could be so enormous and scary….

In America the naysayers have been rather more vocal for longer. Famously, Warren Buffett, the billionaire who made his money the old-fashioned way, called them “weapons of mass destruction”. In the late 1990s when confidence was roaring in the midst of the dotcom boom, a small band of politicians, uncomfortable with the ease with which banks would be allowed to play in these burgeoning markets, were painted as Luddites failing to move with the times….

What is a Derivative?

Warren Buffett, the American investment guru, dubbed them “financial weapons of mass destruction”, but for the once-great-and-good of Wall Street they were the currency that enabled banks, hedge funds and other speculators to make billions.

Anything that carries a price can spawn a derivatives market. They are financial contracts sold to pass on risk to others. The credit or bond derivatives market is one such example. It is thought that speculation in this area alone is worth more than $56 trillion (£33 trillion), although that probably underestimates the true figure since lax regulation has seen the market explode over the past two years.

At the core of this market is the credit derivative swap, effectively an insurance policy against the default in the interest payment on a corporate bond. One doesn’t even need to own the bond itself. It is like Joe Public buying an insurance policy on someone else’s house and pocketing the full value if it burns down.

As markets slid into crisis, and banks and corporations began to default on bond payments, many of these policies have proved worthless.

Emilio Botin, the chairman of Santander, the Spanish bank that has enjoyed phenomenal success during the credit crunch, once said: “I never invest in something I don’t understand.” A wise man, you may think.

Simon Evans

http://hotair.com/archives/2009/08/21/video-obamageddon-in-2012/

Guaranty Bank, with 162 branches in Texas and California, saw its investments in real estate lending and mortgage-backed securities bought from other banks sour and had been teetering near collapse for weeks. Its parent, Guaranty Financial Group Inc. (GFG), reaffirmed Monday in a regulatory filing that the company was critically short of capital and didn’t believe it could stay in business.

http://apnews.myway.com/article/20090822/D9A7RG480.html

The FDIC seized Austin-based Guaranty Bank, with about $13 billion in assets and $12 billion in deposits, and on Friday sold all of its deposits and $12 billion of its assets to BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA, Spain’s second-largest bank. In addition, the FDIC agreed to share losses with BBVA on about $11 billion of Guaranty Bank’s loans and other assets.

Guaranty Bank, with 162 branches in Texas and California, saw its investments in real estate lending and mortgage-backed securities bought from other banks sour and had been teetering near collapse for weeks. Its parent, Guaranty Financial Group Inc. (GFG), reaffirmed Monday in a regulatory filing that the company was critically short of capital and didn’t believe it could stay in business.

This is just a guess on my part, but watch out limb here I come. I think that we will find out that the
BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA is somehow connected to Muslims or Chevez. There is going to be something that cannot be good.

There was something during the primaries in a debate with McCain and Obama. Obama was distainful of something McCain said about Spain, and John just gave Obama a look. Wish John would have said what he was thinking. Looking back McCain was constantly being called hotheaded and told not to go after Obama, all was calculated to neutralize John. Wish he had have gone for Obama jugular, figure of speech only

http://apnews.myway.com/article/20090822/D9A7RG480.html

WASHINGTON (AP) – Guaranty Bank became the second-largest U.S. bank to fail this year after the Texas lender was shut down by regulators and most of its operations sold at a loss of billions of dollars for the U.S. government to a major Spanish bank.

The transaction approved by the Federal Deposit Insurance Corp. marked the first time a foreign bank has bought a failed U.S. bank.

The bank failure, the 10th largest in U.S. history, is expected to cost the deposit insurance fund an estimated $3 billion.