MoneyAccumulator.com

This video was uploaded by NDTV on Dec.22, 2011
Looking at M2, the Federal Reserve is printing more in secret and injecting it in the stock markets, keeping it inflated…preventing it from collapsing, but it will happen.

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All U.S stock market indexes took roughly a 3.5% haircut today. Question is this, “Is it down from here?” and “Is there going to be a santa claus rally this year?”

The answer to both of these question is who knows, anybody’s guess. The stock market now a days have pretty much been manipulated by the U.S Government and Federal Exchange who pump borrowed /printed money into the markets to inflate them.

I recently added more HQD.TO (Horizon Nasdaq Bear ETF on TSX) position, the reason is because I foresee limited upside and more downside risk within the next 1.5 years. The Nasdaq from here might pop a little higher towards 2700 but I do not think that would happen this year.

The reason why commodities prices drop is simple, when good times are here, demand for commodities increase. More computers, electronics and other products requiring commodities like gold, silver and rare earth minerals are being manufactured, because the economy is in a growth stage more products are being sold to consumers and corporations.

I’ve been keeping a close eye on the Nasdaq and it has been trading in range right now between 2350 to 2470. There seems to be downward pressure because every time it rallies up, it cannot seem to get past 2470 to shoot through previous high of around 2560.

All over the financial news, they say that traders are all waiting for an announcement from Ben Bernake at the Jackson Hole, economic conference. So, that is why there is a range being formed until the Friday announcement.

If this future trader is betting that the Dow Jones Industrial Average is going towards near 2009 lows of 8200, then it should take the Nasdaq also down to near 2009 lows, which is around 1750 points. I would have to agree with this view and it might take several months to get to that level, however you never know sometimes with the market, so we will just have to wait and see.

I started purchasing HQD.TO (Horizon Bear Nasdaq ETF) again. Some at 2450, and then some at 2500 points on the Nasdaq. I will look at loading up some more when the Nasdaq hits 2578 or higher, if it ever gets there.

If you think about the highs for the Nasdaq this year which was slightly above 2800, it is unlikely in this current economic environment that it will hit that high again.

About 6 months ago I warned a family member to move all his investment to cash or Canadian bond position, however the response I got back, was “Why should I do that, the financial stocks are doing very well now.”
I however, did not press the issue with this family member because I didn’t want to seem like a know it all, but I knew that the rise in the stock market will be followed by a sharp and violent downturn and it finally arrived.

Over past few weeks, Cisco, Lockheed Martin and Borders announced a combined 23,000 in job cuts and today RIM announces 11 percent layoff (2000 employees) also on the Canadian front Bombardier has cut work forces in their train transportation factories.

Second half of 2011 may not be as rosy as economist think it would be. Going into mid 2012, I think world economy is going towards another recession.

While the American government has been spending wrecklessly the taxpayer’s money for over 30 years, China has been spending it carefully to facilitate growth and amass a surplus. America’s spending is akin to a person addicted to credit card, that goes out and consume on stuff he doesn’t need until he racks up a huge debt that he/she can never pay off.