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Wall Street Loses All Of It’s Gains For 2011

What a ride it’s been on Wall Street this week. Traders and investors alike pulled out a lot of money from the stock markets on the lack of confidence in the government. With all the hype about raising the debt ceiling to save the country from defaulting, Wall Street still feels that the United States is not out of the woods yet. As it is, concerns about the credit rating agencies Standard and Poors, Fitch and Moody’s may downgrade the U.S. on the grounds of having too much debt as it is.

The DOW, S&P 500 and the NASDAQ are down after the week of doubt did it’s thing. All three of the indexes are down 10% from their recent highs and any gains they had for the year 2011 is all but erased. Equities are not the place you want to be in when the economy is in turmoil, the dollar is losing it’s worth on a daily basis and the Federal Reserve is thinking about QE3 and printing more money.

For those of you that have been following me for some time (and for those who are new, can read past articles) know that I’ve been calling for this to happen since before the New Year. I have no confidence in the markets or in our government. Since the beginning of 2011, I’ve been buying commodities such as gold and silver. No matter what the federal Reserve does about printing money, it can’t create more gold and silver than what is in the world. For that reason alone, I’ve been buying what I can for some time now.

Here’s a video that was posted today by GoldMoneyNews. The video is how silver is now expected (by analysts) to be the big mover in the near future. Typically gold trades at 16 times the price of silver. With that in mind, then silver should be trading at $100 per oz instead of it’s current price of $38 per oz.

So don’t expect good things from the markets in the near future. Our economy is still in shambles, jobs are not coming back quick enough and it’s not just in America that this is going on. Buy precious metals now and hedge yourself from the mayhem that may ensue.
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Fears Over The Economy Hit Wall Street

I’ve been saying for some time that the strength on Wall Street is only temporary. With the political game that Washington has been playing, our economy has not yet started to recover or in some cases, hold on to their current levels. The debt ceiling has been an issue for months and in the eleventh hour Congress finally gets their act together to pass an extension. What’s good about an extension for the long term? Nothing.

Standard & Poors along with Fitch and Moody’s are concerned about the true condition of America’s deficit and the ability to function within a budget. It’s been over 800 days since Congress has passed a budget and that’s because they’ve been spending money and if they had a budget in place, they wouldn’t be able to do as they’re doing for the last few years.

As you can see on Wall Street, investors are moving their money out of equities and moving them to saver havens like bonds, precious metals and in some cases, overseas. The DOW lost 266 points earlier this week and claimed back only 30 point the next day. As of this morning at 10:45am, the DOW is down another 208 points and who knows where it’s going to close at the bell. Since Monday morning the DOW has lost nearly 5%.

As for the NASDAQ, it too has taken a hit during this week thanks to the uncertainty of the actions going on in the Beltway. NASDAQ is down (so far) this week over 5% along with the S&P 500 dropping 6% during the same period. A sign of things to come in the near (and possibly long term) future.

Do what they smart money has been doing for quite some time and that is buying gold, silver and other precious metals. Gold has gained 10% since June and 4% in just the last few days. How can you sit by and watch as others, who have a better idea of the markets, as they move assets to other sectors to hedge against the inevitable pullback on Wall Street? I suggest you really look at your portfolio to see how diversified you are and make the appropriate moves to balance it. Remember to not put more than 20% into any one sector or individual stock. Doing so may cause you to lose more than you would have if you diversified.

As for me, I’ve moved out of most of my positions in equities. I’ve been building up positions in the commodity sector, mainly gold and silver, to get ahead of the currency issue plaguing our country as well as the world. You might want to do the same.

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Gold Climbs Above $1600

Only three weeks ago I spoke about the price of gold falling below $1500 per ounce. What I said was if the economic woes continue even with all the hype of how our economy is improving, I expect gold prices to keep climbing. I also said that I don’t trust any government at this time.

Today gold prices climbed above $1600 after eleven straight days of climbing because of fears of the federal government will not be able to raise the debt ceiling. The precious metal hit an all time record high against the Euro and sterling. Gold has been strong ever since Europe has been trying to bail out Greece for the second time and to avoid the European debt crisis. Add to the fact that the Obama Administration and Congress have been unsuccessful in coming to an agreement to raising the debt ceiling.

If you didn’t think it could climb any higher, I would seriously take a look at the technical charts which seem to point to gold moving above $1700 as soon as this fall and many think a move to over $2000 per ounce isn’t too far fetched as it once was.

When you think about adjusting for inflation, gold is still not as high as it could be in relation to the price in 1980 near the end of the Carter Administration. As I said three weeks ago, I don’t have faith in the federal government to do the right thing and lower the spending and not to raise the debt ceiling. With that in mind, I still think that gold is a great investment at this point. I feel it will remain high until after next year’s election. If for some reason the government can put some sort of plan in motion to reduce the deficit, gold will take a plunge and a big one at that.

In the meantime, silver has also done well over the last three weeks when it closed at $33.59. It closed today at $40.27, topping the $40 mark for the first time since May. Silver has climbed more than 15% in just the last two weeks.

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Commodities: A Gift To My Children

If you’ve been reading this blog for any length of time, you know that I’m expecting to see the stock market take another plunge. So where are we to invest? Commodities, that’s where. Commodities like gold, silver other precious metals, oil, natural gas corn and sugar can not be printed in a few minutes or hours. It can not be manipulated as easily as any government currency. The Federal Reserve is printing money like they’re Kinko’s or something.

I’ve been building up a nest egg of commodities for sometime. It’s not something I’m doing because of the current situation of the U.S. economy (actually I’m am buying more than I’ve done in the past), I’m doing it for my children. My daughters are teenagers and soon enough they’ll be on their own looking to make it in this world. who knows what the world currency is going to look like in just a few short years. If the United States doesn’t do something now to solidify their financial sovereignty, who knows how things will be. Right now oil is traded in U.S. dollars and China and the United Emirates are discussing reducing their holdings in U.S. dollars and not using the dollar has a the way to trade oil.

So what should you be buying? Gold and silver are the best things at this moment that average investors could and should be investing in. Gold is trading this morning at $1,518 an ounce and silver is trading at $34.74 an ounce. I know you’ve heard the advertisments, seen the ads and listened to the stock news programs stating that we should be buying gold and silver. So have you been buying gold and silver? If you haven’t, remove your head from your butt and do so. Yes gold was trading at less than $1200 on ounce last year and silver was going for about $12 an ounce, but they’re going to be much higher next year so don’t waste time.

There’s a new book out from a man who retired at the age of 37 after making his money the old fashion way…he earned it. Jim Rogers worked as a young kid and a teenager, to investing his money in the markets. His new book, ‘A Gift to My Children A Father’s Lessons for Life and Investing’ helps us prepare our children for the trouble times that are coming in the near and the distant future. Jim discusses the troubled times ahead for the U.S. dollar, he actually believes it’s “doomed”. The book is a great source for teaching our children about investing and other life lessons they’ll need to survive in this world.

Click the book to view or purchase.





I’ve been showing my girls how to trade stocks, look into real estate investments and investing in precious metals. This book helps to bring the message home about how important it is for parents to teach their children how to prepare for the future. I feel that too many of the younger generation is not aware of how to be financially savvy. Especially since the public school system doesn’t have time to teach the students how to balance a checkbook, nevermind invest in themselves.

So pick up Jim Rogers’ book ‘A Gift to My Children A Father’s Lessons for Life and Investing’ at Amazon or any bookstore. You won’t be disappointed.

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Is Now The Time To Invest?

During the last two years (2008-2010) we’ve seen the stock market as well as the housing market and financial institutions go through a very rough period of correction. Now in the second half of 2010, average investors are wondering if they should start investing again. Well it depends on what you’re going to invest in.

We are no where at there bottom or the worse of it yet, but at the same time I’m looking at many different investments I may want to get in on. I will say though that the stock market is not one of them at this time. In my opinion, there is no reason for the DOW to be over 10,000 and I do expect it to come back down below 9000. When I do not know, but it will be there in due time.

What about precious metals? There is only a limited amount of gold in this world and it’s one of the few things that will retain it’s value (if not go up) in our present economic condition. I’ve been building a portfolio of just different precious metals. If you’re looking to buy gold make sure you are buying actual gold pieces and not some paper stock that trades off of gold. Between the two, only actual gold will be worth anything when and if our economy crashes.

As for the housing industry, I suggest you take your time and look for solid and profitable deals. The housing market will not turn around any time soon so you will have plenty of time to find the right one for you. We will see foreclosures going on for years to come so prices will stay in the general area if not come down even more. As an investor, you will need to look at properties that will return to good value in five to eight years from now. The days of flipping houses are on hold and will be that way for some time.

Stay away from investing in any financial institution since they are still not sure of what will happen in time with all the government regulations that will be coming down the line. So is it time to start investing? Yes if you take your time and study what it is you want to invest in.

What happened to the stock market today?

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