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Money Matters Financial News Letter with Money Analysis. October 7, 2012
Marc’s Notes
Financial Updates:
Welcome new subscribers to our Money Matters Newsletter.
Let’s get to what’s going on!
Markets:
The Federal Reserve’s new program of money printing (QE) is kicking in and the stock markets are slowly inching higher. Gold is rising with all this money printing going on and the most common questions I get asked is should I buy gold and should I buy real estate.
Be clear on why you own an asset and the question answers itself.
We own gold for insurance against a money implosion similar to a Mexican Peso moment where money buys squat. Money printing by the Federal Reserves (QE programs) causes inflation and the FED has even said it WANTS inflation. Why would they want inflation as it destroys wealth through loss of purchasing power? To goose the banks and Wall Street.
Bernanke has said as much during his speeches. He believes boosting stocks and house prices will make people feel wealthier (called the wealth effect) and then you will go out and spend more. By boosting bank reserves he also hopes the banks will lend it out so you and I (you guessed it) spend more. Never mind the fact we borrow to spend, that doesn’t compute with him. As long as we SPEND more the economy will get better (so he thinks). Try the “spend till you drop” at your house and see how far you get!
So should you buy gold? Over time I suggest you look into it. Its really the only thing you can hold in your hand and have no ones promise on it. It can’t be inflated nor can broken promises devalue it.
Buy plain old generic gold bars but I do not recommend rare coins or any graded coins. Buy the cheapest gold bars you can. Need a place to buy? Email me. Moneymatters@kvmr.org.
Should you buy real estate? If you can afford the payments without a renter or if you lose your job, ok. If either of these 2 situations will cause you to default, then be careful.
Real estate has been going down for years despite what the realtors say (do NOT listen to them for real estate advice. They get their information from an economist paid for by the National Association of Realtors and they have been wrong for YEARS!)
Housing will continue down for years unless we see massive inflation.
If we see massive inflation, interest rates will spike and that will crush the housing market as well. Keep in mind, interest rates are as low as they have ever been yet house sales are almost as bad as they have ever been. You would think with low rates, houses would be flying off the shelves but they are barely moving when compared to historic sales volumes. Now look at the chart below of house prices. That ski slope you see is home prices that realtors keep telling us all the way down it “is coming back”.
As you can see for yourself, the trend is awful. Now remember rates are DIRT CHEAP! Once rates rise, this slope will again turn down. That being said, if you find your dream house and don’t mind if it drops more, then ok. Also lots are not selling so make your offers so low on empty lots the realtor pukes. Force them to make the offer (law requires it anyway) and wait until you get a realistic seller that knows the market is only what someone is willing to pay. Don’t listen to realtors telling you the value of something. They got is ALL WRONG before and will waste your money if you follow their advice as to what to offer. You know your offer is good if the realtor loses his/her lunch when you reveal your “half off” offer.
A good rule of thumb is to take the list price and start by cutting it by 40 % or so, and then go up from there on counter offers if you really want the property.
Stocks:
As for now, markets stay flat but inflationary funds are rising like gold and food. I suspect the markets will be fairly dull until the days before the election. Israel will not strike IRAN until AFTER the elections. Expect news on this shortly after the election. That will be a good time to gamble on oil through UCO or other oil plays. I will add UCO as it trends lower into the mid to high 20’s. This should be a fairly good gamble me thinks.
Other gambling plays are Apple in the 640, 650 range through options or downright stock buys. VXX in the 8’s, and MCP in the 10’s. These are short term plays only and should be sold when you are up 10% or set stops to protect profits. Set stops to limit losses at 15 % below your buy in price.
Money Matters Radio airs Thursday October 18th at noon PST on 89.5 KVMR FM or 105.1 IN Tahoe or worldwide at www.kvmr.org.
More news:
FREE SHOW on website just changed! Download for free. Show # 125 “Greece will eventually default” . See the left side menu under “FREE SHOW” and download it now!
Money Classes:
Sign up for Money Class 2 now. (you should attend class 1 to fully understand this class).
No date set but email me to register. Cost will be $199.00 and includes meal but send in your check within the next 10 days (postmarked before Oct 18th) and take $50.00 off!)
Mail to: Bay Area Process, PMB 101 578 Sutton Way, Grass Valley, CA 95945.
Covered will be:
Gold- where, when, why and how.
Real Estate: Should you? How? Why? How much? Rental or Lots?
Overseas-How do I move money offshore? Why? How much? Pitfalls and traps. Where?
Dividend Stocks- Higher paying stocks, review of why and how.
Conservative investing.
What to do with inheritance.
Walk away from your house or short sell?
What bank do I choose?
Should I drop my current advisor?
Things to avoid: Common pitfalls and traps.
Where can I get help later?
Answers to all your questions!
Also another class 1 (beginning class) is materializing. Cost is $199.00 but early discount also applies.
Covered will be:
Money and what it is and does
How much should you know about your money
Should and can I manage it myself? YES ! It takes only 2 hours a year. Learn how.
Risk vs. No Risk investing. The key to success! A Money Matters exclusive concept!
How not to lose money.
Where should I invest, how, why and when?
Who do I call?
Gold basics. Gold vs. Silver.
Real estate basics. Should I buy now, sell now or wait. Rental or lots? All your questions will be answered.
Stock, mutual funds and stocks that pay dividends. The market is not what you think!
Bonds: What are they? Should I own them? What should I own and avoid.
Is my advisor really helping me or hurting me?
Answers to all your questions.
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Sign up now and get in early for discounts. Dates will be announced soon. If you can’t make one, there will be more. We do not cash your check until you attend.
Another Super Dividend Payers List is soon to be posted. This one will include a NEW section on a sector that may benefit from the QE (Money Printing) programs of the FED.
These high paying funds and stocks center around US GOVT sponsored mortgages and with the low rates we see now and have been promised to see, these funds are soaring and paying double digit dividends! This new list will be posted soon so watch the newsletter!
Turkey Matters:
Turkey Matters is where I match your funds to buy turkeys for the needy at the NC FOOD BANK of INTERFAITH FOOD MINISTRIES. Every dollar you send in makes me give them one too! Join with me to make your Thanksgiving great! Feed thousands and know on Turkey day many, many families will eat thanks to you!
Mail check made out to the either the Nevada County Food bank or Interfaith Food Ministries and I will deliver it to them mid November with a matching check from my own pocket. (I will match up to $10,000.00)
Mail to: Bay Area Process (make check to Food bank of your choice) PMB 101, 578 Grass Valley, CA 95945
All for now,
Marc Cuniberti
