[Money-matters] Money Matters Update January 4 2009

Sun Jan 4 21:43:45 UTC 2009

Americans' appetite for hybrid cars is evaporating as tumbling fuel prices
and tighter household budgets trump environmental concerns. The sudden
reversal in what was, until a few months ago, one of the hottest segments of
the world's biggest car market creates a new area of uncertainty for
carmakers, such as
<http://markets.ft.com/tearsheets/performance.asp?s=jp:7203> Toyota,
<http://markets.ft.com/tearsheets/performance.asp?s=us:GM> General Motors,
<http://markets.ft.com/tearsheets/performance.asp?s=us:F> Ford Motor and
<http://markets.ft.com/tearsheets/performance.asp?s=jp:7267> Honda, that are
investing heavily in hybrids and other fuel-efficient technologies.

Jan. 2 (Bloomberg) -- Treasuries plummeted, with 10-year notes falling the
most in six weeks, as stock prices and other broad measures of risk-taking
increased, leading investors to sell U.S. securities.

NEW YORK (Reuters) - Chrysler LLC on Friday received an initial $4 billion
emergency loan from the U.S. government, two days after the government
completed a parallel payout to its larger rival General Motors Corp.

Marc's Notes:
News Item # 1- Americans are even cutting back on hybrids. Car sales in
general are flat out dismal and at an historic pullback ratio. Our car
companies lost money during the biggest boom of all time, when foreign auto
companies ate their lunch. Now we bail out these dinosaurs feeding the
walking dead our hard earned money, further wasting our resources on these
inefficient giants. The BIG 3 auto CEO's claimed it is the credit crisis.
Nothing could be farther from the truth. They LOST money continually over
this huge boom we had. Now they lose even more. We should let these failures
go, and re employ our workers under good management running profitable
companies. But that won't happen.

News Item # 2- The article has dire ramifications. Tune in January 15 th to
our show. The Treasury bubble is the biggest and most dangerous yet. You
MUST hear my show on the 15th. Out of range?  www.kvmr.org
<http://www.kvmr.org/>     push "LISTEN LIVE" anywhere on the planet.

News Item # 3-  Pertains to my previous comment but Chrysler is privately
owned. Who do we bail out next? Toys R Us?  The US Government slowly
tightens its grip on private companies, heading us into a socialist, fascist
business model strictly prohibited by the Constitution. Why do we stand by
and allow this to happen.

Markets:
Neutral to positive with the inauguration. There are stock plays right now,
most of them mentioned in my previous emails. Make no mistake. The BEAR is
alive and well but in hibernation until March or April. The OBAMA hope rally
continues. The wild card is the mid east. I mentioned the HAMAS violence MAY
have been directed by the Saudi's to get the price of oil UP. A horrible
thought to be sure, but one we must consider. After all, they tried cutbacks
and that didn't work. I do not put it past evil people to install death as a
tool for profits. 
Rest assured:
 "Do not take revenge, dear friends, but leave room for God's wrath. For it
is written, "Vengeance belongs to me. I will pay them back, declares the
Lord." Romans 12:19

The US Conundrum:
With the biggest bubble in treasuries now forming, a conundrum exists with
dire consequences. It goes like this. The US FEDS are selling trillions in
debt ( TREASURIES and BONDS) to finance these bailouts. With the markets
upside down and everything getting slaughtered with the last market fall,
investors are buying this debt in the form of treasuries, thus allowing the
US to continue it's financing. (by borrowing more by issuing these
treasuries). So far ok. But if the market recovers, since the treasuries are
paying little to no interest, investors may look to the rising markets for
better returns the zero interest. If they do, they will then start SELLING
these very same treasuries, removing the ability of the US to continue to
borrow. If they do start selling these treasuries in mass, a rush OUT of
treasuries will cause a glut of them on the market, then sellers of these
treasuries will have to pay more interest to prospective buyers to get rid
of them, hence interest rates around the world will RISE.
Rising interest rates will put a halt to the US ability to borrow, as they
will have to pay more interest, and if a MASS EXODUS out of treasuries
happens, interest rates could spike A LOT. This would crash the US dollar
worldwide and my darkest fear will materialize. This may already be
happening. (See above article # 2).
There are many ramifications of all this US debt we are incurring beside the
above treasuries problem. Will the Chinese stop buying our debt? Will
foreign investors see all this money the US is printing and realize holding
US dollars made by a print happy government a bad investment? (Yes!) Will
foreign investors look to other currencies that pay more interest and flee
the US dollar, selling them in MASS? ( probably). What will the US do if
they cant sell any more debt? (treasuries). Rising interest rates will also
CRUSH the US debt laden economy and it's citizens. Will they start buying
their own debt (treasuries) with more printed money? (Monetizing- Show # 3)
This "monetizing" is also called "quantitative easing", and is starting to
take place now. What are the ramifications of "quantitative easing?"
MASSIVE INFLATION down the road. Make no mistake. You cannot print your way
to prosperity. You cannot solve a massive debt problem by creating more
debt. But that is what they are trying to do. Obama will do more of the same
and has said so. You have another respite so prepare your finances.
Meanwhile there is money to be made and protection to consider.

Holdings:
RRPIX  Interest rate fund- Starting to rise. Consider this and RYJUX to
protect against the conundrum above. Use these funds to balance out our
other T BILL Funds, SHY  VIPSX   TIP.  These 3 are starting to fall. Watch
these funds. IF they continue to fall and RRPIX continues to rise, our
conundrum may be happening. It all comes down to interest rates now. IF
rates starts to spike quickly and the US dollar starts to fall QUICKLY, take
cover fast. Note that our foreign currency funds are starting up again like
we said they would. Keep an eye on these. They are your canary in the mine.
Gold and silver as well but they will manipulate these to hide the
conundrum. Whether they can hold the line with gold and silver remains to be
seen, but they will try. Expect "takedowns" of the gold and silver price
from time to time to discourage you from holding them. Don't fall for it and
continue to buy. Hold physical metal as well as funds. Continue to
accumulate foreign currency funds; most of ours pay dividends to boot. 
OIL -  starting to rise as the Saudi's held true to form and covered us on
this trade. Our dividend payers in energy are a way to play this and get
paid to boot. They are starting to rise again. Ditto with Uranium, an
"alternative" energy sort of.  URPTF or NLR or CCJ will follow this energy
source. URPTF is up 50 % since our second buy in, but still way down from
our first recommendation last year.  ADD   Look into PQ for a real gamble on
a small oil company. Pays no dividends though.
SLV - Silver       up 15 % since our buy in.  Nice trade here if you have
some time. ADD.   Same with GOLD but remember, nothing goes straight up and
you could see takedowns in both of these anytime. Right now the momentum is
UP.  Try DGP  double leverage gold fund. Dangerous but will skyrocket with
rising gold prices
Obama play- PKB- Infrastructure play. Good for an OBAMA pop and up slightly
since I mentioned it. ADD   Look into other infrastructure stocks like
pumps, valves, equipments, engineering. Etc.
Real estate- URE   double real estate fund. Will rise when OBAMA announces
more bailouts for homeowners. Remember, a MASSIVE all out bailout of home
mortgages is coming when the FEDS realize they cant keep putting band aids
on the banks housing problem. They will PAY the banks with tax money to
reduce mortgages across the board. Real Estate leveraged fund: URE-  Up 10 %
since  I mentioned it. We will sell this in Feb, March or April when the
"hope " wears off and go short real estate again, but for now, this fund
should reap profits with all the hype about a housing recovering. (Which it
is not).
Retailers: Up again- makes no sense, but you can't fight the trend. I sold
out Best Buy puts at a small loss and will stand aside for now. Retailers
are following the general market right now, but I can assure you, you will
see massive retailer bankruptcies starting Feb and beyond. There will be a
time to short retailers in a month or so.
Financials- do not add long or short. Unclear how the markets will look at
these. They are terminal but remember, the market doesn't reflect reality
immediately, only the "PERCEPTION" of all the investors in it on any given
day. Financials will fall again eventually but I cannot tell when right now.
I suspect in the spring with the market fall that will happen then, as I
mentioned above. The market will test 7500 again in 2009.
Swiss Annuities; The actions of the US Government is so dangerous its scary.
You simply MUST have money out of their grasp as a diversification and one
of the only ways to easily do it is with one of these. (Free book- email me
your ADDRESS for mailing). They pay interest and a dividend and accumulate
these payments TAX FREE until you take it out, like an IRA, but with no
LIMITS and no reporting. If you max out your IRA's and still need to tax
shelter money, these are perfect. (Note: Do not confuse these with American
Annuities- They are a RIP OFF- my opinion).
Tankers: As we have said the last 6 months- do not add. Tankers are
suffering from lack of trust in payment. Hold those you have. You should
have sold DSX and OCNF due to their eliminating their dividend payments.
Dividend Payers- Ok to add, especially energy. Ditto with DBC   DBA
commodity funds. (Inflation hedges).
Whats next:
Inflation is starting to awaken again. It is clear. With the amount of money
they are now printing and adding to the system, it is coming and big time. A
hyperinflationary "crack up" boom is in our future. How long the US can
dance remains to be seen. They have many tricks up their sleeve but they are
just tricks. So far, foreign investors continue to believe in our supremacy.
So be it. You have a respite as I said before. Things can go south in a
hurry so take this opportunity to consider unloading your nonpaying long
mutual funds your advisor got you into and either hedge with the above or
get paid with dividend payers. Remember, even if the stock market goes down,
you still will double, triple, quadruple your money in dividend paying
stocks as LONG AS THEY KEEP PAYING YOU, and so far, ALL of ours are still
paying with the exception of the 2 tankers mentioned above. Don't wait for
an increasing stock price, get paid no matter which way the market goes.
Don't understand what I mean?
Then schedule a consult with me by emailing JEN here at my office. Cost is
minimal and spots are open until I get operated on, then I will be out of
commission for 6 weeks. (NOT looking forward to THAT!) Need a list of high
dividend payers? Email us (there is a fee).
Upcoming Show: January 15th  Noon  . Out of range?  www.kvmr.org
<http://www.kvmr.org/>     push "LISTEN LIVE" anywhere on the planet.
"The Biggest Bubble!'      This show is a MUST listen. It holds answers to
what is coming and how to protect yourself.
All for now- Happy New Year!
Marc

Our website is coming but for now you can go to the KVMR website and
download free past newscasts in a PODCAST as well as TV links, with past
show titles there as well.
(Past shows are not available on podcasts however) On the new site, you will
be able to download past shows and listen to newscasts- everything you need
automatically.

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