Euro Recent Decline

The Euro’s recent steep decline versus the U.S. Dollar, which began in December is very bad new for the U.S. economy, stock market, commodities markets and the price of gold.  

Did you know that since the Euro’s inception in 1999, its highs and lows as compared to its exchange rate with the U.S. Dollar have been accurate in predicting every significant rally and sell off in the U.S. stock market?  

The Euro’s steep declines versus the U.S. Dollar in the late summer of 2008 and winter of 2009, preceded or precipitated the crashes in the U.S. stock market, which occurred in the Fall of 2008, and the Spring of 2009, respectively.  Even the bursting of the dot com bubble in April of 2000 and the ensuing economic downturn in the U.S. can be blamed on a steep 15% decline in the Euro which began on Janaury 3, 2000. 

Since the Euro has already declined by 10% and continues to fall I expect that next shoe will soon drop, which will be a sharp sell off in U.S. stocks.  I am advising all of my family, friends and anyone who has followed me at www.equitiesmagazine.com, www.stockdiagnostics.com, and www.bearmarketnavigator.com and www.onlinefinancialsector.com to get into a 80% cash position in their stock portfolios, mutual funds and retirement plans.  The 20% should be invested in health care, online investor services and airlines.  That’s right, airlines will reap huge profits as I expect that the price of oil and jet fuel will also decline significantly during 2010.  That’s why airline stocks despite the recent downturn in the U.S. stock market are regularly advancing beyond their 52 week highs.      

In May of 2009, I wrote an article ““Safe Haven Status of U.S. Delays Recovery”.  In the article I explained the logic on why the U.S. Dollar would eventually go to all time highs against the EURO regardless of the size of the U.S. budget deficit.  I also explained, that should this scenario unfold, it would wreak havoc on the U.S. stock market and put significant downward pressure on commodity prices including gold and precious metals.  What I predicted is now begging to unfold.  The U.S. Dollar has already advanced by over 10% against the Euro since December and I predict that the Dollar will go to all time highs against the Euro during 2010.  This march up against the Euro by the Dollar was triggered by the sovereign debt crises of Dubai and most recently Greece.  For a more in-depth understanding on the impact that Greece will have on a further decline in the Euro and the U.S. stock market, I suggest a review of my report “The Damage to the Euro has Been Done”. 

Investors should give serious consideration to my concerns and predictions about the rising Dollar and the impact that it will have on global stock markets and the Global economy.  In my September 2007, Equities Magazine article “Have Wall Street’s Brokers Been Pigging Out” I said that “there will be a day of reckoning … and that day will be ugly for the five largest brokers” and to avoid the shares of each of the five including Merrill, Lehman, Bear Stearns, Morgan Stanley and Goldman Sachs when they were trading at or near to their all time highs.   On October 2, 2008, I posted a blog on GE, “GE and its Shares are Skating on Thin Ice”, warning investors to sell GE shares when they were trading at $22 when even Warren Buffet was buying them.  They subsequently fell to below $6.00.  In my October 7, 2008, posted blog, “Look Out Below”, I said that the “stock market will continue in its free fall” and that proved to be the last day in which the Dow 30 traded above 10,000 for more than a year while falling by 40% to its March 2009, twelve year low.  In my January 12, 2009, blog “Bank Stocks Led by Citigroup will Soon Send the Stock Market to New Lows.”, I predicted that the shares of Citigroup and the financials would lead the market lower.  Citigroup’s shares promptly fell from over $6.00 to under $1.00.  In October of 2009, I concluded a research study, which culminated with me writing an article “Tracking Revenue to Find the Bottom of the Bear Market” and publishing a video, on my findings that revenue for most industries in the U.S. was contracting at an alarming rate.  Most recently, on January 15, 2010, I posted a blog, “The Era of Consumerism has Ended” which was one day before the major indices including the Dow 30 and the S&P 500 reached their highest points since the crash began in September of 2008.  In my blog, I had said that the stock market had become frothy and would be much lower by the end of 2010.  For more information on my predictions I suggest a review of my top ten historical predictions. 

Investors should be more proactive than ever right now.  Many, who watched in horror as their investments and 401ks declined by more than 50% between October of 2008 and March of 2009, have become lethargic and they will likely be numb to the soon to be increasing volatility and sell offs in the stock market.  This is because the significant rally of the stock market in 2009 bailed them out.  For more on why the stock market in 2009 was able to stage a magic act that created what will prove to have been a huge temporary rally in the face of deteriorating economic conditions in 2009, I suggest a review of my January 25, 2010, article “Financial Regulator Reform is a Game Changer”.   

Financial planners and investment advisors should not be trusted to protect investor portfolios, which consist of mutual funds and stocks.  A majority of them have a conflict of interest because they are annually paid a fee, which is based on the amount of mutual funds and stocks owned or held by their clients.  FINANCIAL ADVISORS ARE NO LONGER PAID A FEE AFTER STOCK AND MUTUAL FUND ASSETS ARE LIQUIDATED AND MOVED INTO CASH OR MONEY MARKET FUNDS.  THEREFORE, AN ADVISOR WILL DO EVERYTHING THAT THEY CAN TO KEEP YOU INVESTORS FULLY INVESTED IN MUTUAL FUNDS AND STOCKS. 

Finally, I recommend that investors do not fret about the possibility of my predictions coming true.  Instead of being scared they should instead become fully educated on how to invest during a bear market or for extended periods of economic contraction.  Those who are knowledgeable on those types of companies and industries which thrive during periods of economic contraction and bear markets will be able to generate returns that are as high as those that were obtainable in the previous bull market which ended in 2007.  I can say this because I began my career in the stock market in 1977, which was during the previous secular bear market.  For more information I suggest a review of my article or report, “A Super Bear is Upon Us” and my other free research reports and videos which are available at www.bearmarkettracker.com.