The Yo-yo Effect

This week has seen a very bumpy ride in the financial markets. Ever since last week's reports regarding solvency problems with the historic investment bank Bear Stearns and the subsequent proposed bailout by the Federal Reserve and JP Morgan Chase, the markets have been in a tizzy.

Today, the stock market pulled back significantly with the Dow Jones Industrial Average dropping almost 300 points, a 2.36% decline. This was after a 420 point gain on Tuesday. This was the second 400+ point gain in the last six sessions. The S&P 500 index also fell today by 2.43%, and the NASDAQ index fell 2.57%. The Russell 2000 index also fell 2.61%

This drove bond prices up. Bond prices jumped as investors again looked for safety. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.34 percent from 3.50 percent late Tuesday.

News that the government plans to free up billions of dollars at Fannie Mae and Freddie Mac, a move that could help struggling homeowners, for a time helped quell some of the market's fears. This was good news for the mortgage companies. Fannie Mae jumped $2.49, or 8.8 percent, to $30.71, while Freddie rose $3.88, or 15 percent, to $29.90. But it couldn't stave off selling late in the session by investors who have seen big advances evaporate many times during the course of the credit markets crisis and decided to preserve some of their gains.

The Fed's rate cut on Tuesday, while sizable was less than many on Wall Street expected who had predicted a 1% rate cut. That helped give a boost to the anemic dollar against other major currencies, which led many investors to dump hard assets from oil to soybeans. Light, sweet crude oil fell $4.94 to settle at $104.48 per barrel on the New York Mercantile Exchange, the biggest one-day decline for a front-month oil contract since 1991. Gold for April delivery fell $59 to settle at $945.30 on the Nymex; it was the steepest single-session drop for gold since June 2006 and came after gold hit fresh highs Monday. Silver also fell to 18.40 per ounce, 6.71% decline.

What these wild swings in the market mean is not good for the consumers or the economy. Investors are trying to determine whether moves by the Fed and other regulators to stimulate the economy and stabilize the markets will take hold, but they are unsure and this drives the markets in wild swings. Just as a kid playing with a yo-yo watching it go up and down can get boring after a time, he might try throwing the yo-yo in a different direction. While still tethered to the knot around his finger, the yo-yo can spin wildly out-of-control and not begin to rewind up to the spool.

This is what the international bankers are setting up. After a while when the market doesn't resume normal trends and patterns, they will begin to reveal a new plan with a new currency to sell the idea that this is needed for stability reasons. That new currency is the Amero, and is similar to the Euro for the European community; the Amero will replace the US dollar, the Canadian dollar, and the Mexican peso for a central currency for all of North America. These events will culminate according to some sources in September 2008.

If you don't believe this, just wait. Whether it happens in September or later, it will happen. When it does, you will have further confirmation that these events are orchestrated, not random actions by the market.

If you are confused by all of this, understand that the worse thing you can do is sit back and do nothing. If you do, your assets will erode away significantly by inflation and later by a negative conversion ratio from the US dollar to the Amero. Do whatever you can to get a grasp on what is going on and find someone who is knowledgeable and who you can trust to help you protect whatever assets you have left. I will do whatever I can to keep you up to date with what the market is doing and what it means. If you require assistance, contact me and let me know what you are trying to do. I can give you options to your situation and what to do about it.

As always, the choice is yours and you must live with your choice. Choose wisely.

Wail, you who live in the market district;
all your merchants will be wiped out,
all who trade with silver will be ruined.

At that time I will search Jerusalem with lamps
and punish those who are complacent,
who are like wine left on its dregs,
who think, 'The LORD will do nothing,
either good or bad.'

Their wealth will be plundered,
their houses demolished.
They will build houses
but not live in them;
they will plant vineyards
but not drink the wine. Zephaniah 1:11-13 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com