Markets Sideways. Natural Gas Stopped Out. Housing Down again. Update March 15, 2010

Marc's Notes:

Markets trending sideways but it is perhaps the calm before the storm.  As deficits skyrocket, a US DOLLAR crash or fall is my worst fear, and the worst fear of the Ex-head accountant of the US Govt. the US COMPTROLLER,  Mr. David Walker. His interview is free for download on the site under FREE SHOW.

Meanwhile Greece’s problems with their deficits are a microcosm of things to come. If the EU bails out Greece, the Euro will be seen as a printed currency cancer, much like the US DOLLAR. If they don’t bail out Greece, Greece may opt out or be KICKED out of the EURO and that won’t bode well for that currency either.

The EURO is actually a better currency then the US DOLLAR as the rules state the countries using the EURO can’t print it. Only the European Central Bank can do that. But since so many countries belong to the EURO trust, they all have to behave. So in a way, the currency can’t be printed willy nilly. There are rules, unlike the US DOLLAR,  which can and is printed at will in copious amounts. The Germans and others don’t like bailing out a deadbeat neighbor because the Germans didn’t spend too much like the Greeks did. You see, the GREEK economy is more socialistic. So Greece is a great example of what socialist countries go thru. Spend, spend, and spend until they can’t pay their bills. Much of what is happening to Greece is in our future. Watch for more EURO countries to follow suit. Meanwhile Greek deficit problems will foster many arguments among EURO nations while they wrestle with a solution.
It was bound to happen. Too many countries promising to behave. Yet politicians are politicians. They foster socialistic policies to buy votes. There but by the grace of GOD goes the U.S. except we will get no grace. Stay tuned, its going to get more interesting as the Europeans argue for a solution.

As for the markets, a sideways trend is making way for a break soon. Probably a retest of the DOW 10,000 level. We will see.

Inflation is heating up in China and India. No surprise. Economic stats meanwhile here and abroad are so so, with no real encouraging news.

Housing sales are slowing EVEN WITH THE HOUSE CREDIT. The Government has their grand scheme to KEEP YOU IN THE HOUSE while it spirals down in value. Listen to show #86  “Should You Pay Your Home Mortgage”.  This was one of the most requested shows I have ever done. Check it out.

Prognosis: Housing will continue down. A new house program will surface with your mortgage now being reduced, something I have been saying for more then a year now. They will do all they can to make sure you keep paying Wall Street banks while the house plummets in value so YOU take the hit. Then they will foreclose anyway and keep what you paid them. They will also keep enticing any and all new buyers they can that didn’t get sucked into the original bubble, draining the entire population of potential home buyers and enslaving thousands more in debt. Shameful. Don’t fall for it. Wait, house prices will be lower next year and lower the year after that.


Holdings:
Gold and silver holding remarkably well. I tend toward thinking strength is being exhibited and continue to ADD physical metal but suggest you hold off on adding any GOLD or SILVER stocks as a hard DOW DOWN will drag the metals with it.

Natural Gas- hard down. The Gamblers play should have been stopped out when UNG hit in the 7’s. All options should have been liquidated at a loss since we hit our downside stop.
Long term holders should have stops in place for a 50 % downside of your buy in point. As mentioned when we began this play, you had a 50 % downside risk. Limit it to that.
I sold all my natural gas options at a loss but hold the long term stocks UNG and GAZ looking for a 2011 or a sooner move up. We will see. Only a small portion of your funds should be used for any of these plays.

Oil- Going nowhere and a buy is not in the cards for me. Inflation may drive oil up if the markets don’t plummet.

Interest Rate funds- Going nowhere but when the next US DOLLAR rally hits, I will load up on them some more.

Dividend payers- Do not add at this time except those buying in the 1/3 amounts as indicated in consults.

Contrary funds- Add small amounts for market crash protection.

Safe funds- BIL   SHV   TIPS   SHY and others previously mentioned. MOST of your money should be in these as always mentioned in everything I put out. FDIC insured savings accounts qualify and pay more interest so use these if you can.

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All for now,
Marc