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This is a time when many people who are invested in the stock market will pull out their money. The trouble that they see the banks are in scares them. If their money is not safe in the bank, then where will it be safe? Brokers will start to see funds being taken out of accounts. People will start hoarding money at home. They will be afraid to put it in the bank, and will look for things they can buy like gold and silver coins. You will start to see a trend when you hear your friends say they cashed out their CD’s and bought commodities. People will think that money is not the way to go. They will look for other types of investments that are liquid and safer. (NEWS proof) The financial stocks are not at their bottom yet. Plenty of room to drop another 30 or 40%. Bad earnings will trigger a panic.
You should not have a lot of money in your checking or savings account when this happens. Start looking immediately for an investment that preserves capital. Only the foolish will try to guess at a bottom to the market. Some stocks have a long way to go until they bottom. You will see that some sectors like energy and needed commodities will continue to rise. We have said before that commodities will be the new global currencies. Why not start investing in them now? Take small positions in necessary commodities and protective investments like gold and silver and fertilizers. The fact is that people won’t stop eating and needing increased crops, nor will they see common stocks as safe. (NEWS proof) The hoarding of gold has just begun. It will be some time next year before some sectors start to rebound. (NEWS proof) Those particularly vulnerable over the next six months are banks, retail, and travel stocks. Why have your money sitting idle in the bank when you have a golden opportunity?
QUESTION: Who or what is preventing a total collapse of the financial system?
ANSWER: The Fed keeps moving the ball around so as to make it look like something is being done. As we speak, the U.S. government is looking for money from overseas governments and banks.
QUESTION: Who is going to be the victim of this transition?
ANSWER: The average person will bear the brunt through taxes. The winners will be the banks and the foreign partners they bring in.
QUESTION: When will the average American feel the tax hit from these bailouts?
ANSWER: The average American will start to pay additional taxes next year. This will go on for at least 4 years.
QUESTION: How will the American stock market be affected by the mass pullout of funds from brokerage mutual fund accounts?
ANSWER: The brokers will feel the hit first. They will lose a large portion of their commissions and fees. As many as 40% of casual investors will leave the market. The volume of stocks traded each day will fall significantly after the pullout of many investors. The indexes will drop since there’s less people to drive volume and volatility.
QUESTION: What will the smart money do when the retail investor is no longer in the marketplace?
ANSWER: It will become a game only the very rich or well connected can play.
QUESTION: What will happen to 401K plans, and other retirement investment vehicles?
ANSWER: People will let their retirement funds sit in cash or wait until they can invest them outside of mutual funds. More retirement money will be invested in commodities.
QUESTION: What are the safest banks to have one’s money in these volatile times?
ANSWER: Not all banks are in trouble. Find a smaller or regional bank that doesn’t have big exposure to sub-prime loans.
QUESTION: What will this hoarding of gold and silver do to the prices of the commodity and mining stocks?
ANSWER: Prices on gold and silver will skyrocket. Once gold passes $1000, $2000 is not far behind. Miners will be operating 24/7 and still will not be able to keep up with demand. Their profits will rise with the price of gold and silver.