Protecting Yourself
Nothing happened in last Friday’s market – ergo no report. Today was Monday, so naturally things moved forward.
Stocks jumped today and continue in its uptrend. I am starting my death watch to predict when I believe this market will turn downward. I previously predicted that the DOW could reach 10,300 before it turns down; but my call for DOWN will occur after that high is hit, or after whatever high is hit.
Bonds continued stubbornly in their sideways trading pattern and trough.
The Dollar lost a little again against the Euro, and I believe this is one of the very telling signs about how our government is managing our economy – the world is voting against us.
Gold (another sign) went up above $1060 today at its close, and this is great if you own it.
Oil continues its ominous upward trend. Gasoline jumped also, and will hit the pumps very soon as refineries are cutting back on gasoline production – you figure out why.
In the news today….
Canadian Dollar – is heading toward parity with the US Dollar. This weakening of our Dollar is global – not many countries aren’t strengthening against the Dollar. If you are one of the educated investors who are worried about their Dollars being devalued out of sight, then listen up. What can you do? The answer is obvious. If the Dollar continues to fall against other currencies, you just put your money into those other currencies – right? Well, yes providing you understand the risks involved.
What currencies should I consider? If you believe that inflation is coming and the US Government not only knows this, but is planning this, then you want to consider currencies that will do well in an inflationary cycle. During inflation “things” increase in value – including commodities. So, countries with lots of commodities will do better than those without commodities. Canada and Australia are two such nations. That’s why this article started with Canada. Also, Canada is fairly close to us.
One practical matter is how do you convert Dollars to Canadian (or other) Dollars? You can find US Banks that will do it, and you can hold those foreign currencies. But, what if you could get interest paid on those currencies as well as convert them? You would have to have them deposited in a bank. You can chose US institutions, or you can chose institutions outside of the US. Canada for instance. Canadian banks happen to be stronger than US banks to begin with – and that’s a nice feeling. Also, the money is outside of the US Governments immediate grips. You must tell the US Treasury and IRS that you own a foreign bank account, but as long as you declare everything, you are okay, and you are protecting yourself at the same time.
What could go wrong? The US Dollar could strengthen. What would cause that? Well, one year ago we had a major financial worldwide crisis, and the US Dollar strengthened as the world’s population thought things were safer here than there. But, that’s reversed itself as it has become completely (transparently – as our President would want) apparent that we are printing money faster than ever before, and it hasn’t stopped. We are building budget deficits that we will never be able to pay off (ergo our grandchildren will have to pay it). Oh, by the way, if we continue down this road, it has been studied and proven that we will destroy the entire US economy very quickly – but don’t get scared; we have some of the youngest and brightest leading our economic future.
Why am I writing this? To let you know some of the fundamental things going on in the economy and prepare yourself for possible outcomes. There are things you can do. Just take the time to talk them over with your “significant other” – you see I can be PC too – and move forward.
Here are the last numbers for today:
Dow Jones 30 Industrial – 10092 (up 96 points)
10 Year Treasury Bond – 3.40% (down 0.02%)
Euro – $1.4953
Gold – $1061 (up $11)
Oil – $79.40 (up $0.87)
Gasoline – $1.99 (up $0.01)