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Just about a year ago, I published The Economic Storm: Understand It, Survive It and Make Money When It Passes. I focused much of that book on the reasons for the financial collapse of 2008. I felt it important for anyone who trades or invests to understand clearly how we got to where we were, as understanding that would help in making future decisions about where to put ones hard-earned money. As well, though, I also focused on identifying signs that would point to an economic recovery from the recession that began in December 2007, and I recommended some general areas for investing when the recovery began. Those signs arrived and they did point to a recovery, but some of those same signs have shown some volatility, which has led some to conclude we are headed for a double-dip recession. Thinking we are headed toward a double-dip recession is understandable, as the recession lingers on with unemployment at 9-plus percent, the housing market banging around the bottom of one its worst downturns ever, and both consumer spending and consumer confidence unable to stage a strong comeback. True, manufacturing, corporate earnings, and small but positive gains in employment are forming the edges of a nascent economic recovery, but without consumer spending and a decent housing recovery, it might be a while before the key factor in any economic recovery employment begins to rebound significantly. Thus, the words I wrote last year still apply today, only the context is different. We are in much better shape economically.

Accept the possibility that the near-to-mid-term economic outlook for 2009 into 2010 is weak with deepening problems in the short term. Accept that the stock market will continue in a negative or volatile

pattern during that near-to-mid-term future while it continues to search for a bottom Accept the reality that we have serious problems and will have for some time.
Yes, we still have some economic hurdles in front of us, but, if nothing else, the baseline fundamentals of our economy, as well as the baseline fundamentals of the global economy, point clearly to an economic recovery. When that recovery will sustain itself is not clear, yet, but we will find out soon as the monetary stimulus from all governments is rapidly coming to a close. And this brings me to the focus of this Special Report. Even though the economic picture has improved dramatically, that has come at a steep price huge deficit spending from all the major governments, except China. Fiscally, then, the picture is not so pretty, which means that any economic recovery is subject to how we (the global economic powers) work our way out of the potentially dangerous fiscal issues facing us today. This Special Report is a follow up to the book I wrote last year, as a lot has happened in the world since, and the recovery is not as straightforward as my book suggested it would be. I thought it might be helpful if we took a look at where we are and where we might be headed.

Where Exactly Are We?

Arguably (and it is argued quite loudly and strongly), deficit spending was a necessary evil to ward off a major depression on a global scale. Be that as it may, the argument is purely academic now, as we are where we are, and in this place, we investors and traders have to look squarely at the reality of the fiscal issues facing both Europe and the United States.

Current Economic Environment

As I stated, the global economy is on the mend, but that recovery could be derailed because of fiscal policies employed to save the patient. Europe and the U.S. are facing some serious fiscal issues, and one is hard pressed to suggest blithely that we will easily and cleanly extricate ourselves from the potential ramifications of those issues. Clearly, the negative impact is coming. The question is not if, but to what degree that impact will affect the economic recovery and the markets that track the economy, and since my focus is how to help investors and traders navigate these turbulent waters, this is the context in which I will discuss these issues. Market Uncertainty It is interesting to note that the market recovery began in March 2009, some nine months prior to the emergence of the green shoots Ben Bernanke has referenced time and again. This holds true to form, as the market is a leading indicator for the economy. From March 2009 to January 2010, the market steadily regained much of its losses from 2008 and 2009. That upward line, however, began to waver up and down in February as uncertainty about both the global economic recovery and the impact of global fiscal issues began to weigh on the market. Market volatility reemerged, and in May, that volatility dropped the indices to lows for 2010. Note the chart for the DIJA below.

Source: VantagePoint Intermarket Analysis Software Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here The uncertainty that has returned will not go away anytime soon, which will more than likely exacerbate the volatility that has returned to the market as well. So, if we are to assume the market will lead the economy, and it is uncertain if the global economy will be able to sustain its recovery, then we must consider that uncertainty will drive the market for the next 6-9 months, at least. This, of course, means volatility will play a major role in any investing or trading we do. The following statistic fairly sums up the

uncertainty prevalent in the business world, which directly relates to the uncertainty in the markets. More or less, American corporations have some 1.8 trillion dollars in unspent capital sitting on the books. This alone, if unleashed on the economy, would provide a tremendous stimulus to the faltering economic recovery. Market Volatility Even though the fiscal issues referenced earlier are a potential danger to the global economic recovery, one cannot ignore that we have come a long way since the recession began in December 2007. In fact, though some key economic indicators backtracked in May to some degree (housing, retail sales, and employment), others are hanging on to gains, and do not forget, the invisible hand of government is still on the tiller with low interest rates keeping liquidity in the economy. As well, the specter of inflation has yet to show its face, which will help keep interest rates low for the foreseeable future. Bottom line? Expect volatility to remain in the market for some time to come.

The Global Fiscal Issues

The piper has called in the IOUs. The European fiscal situation is clear evidence that it is time to pay up, or not, as the case may yet turn out to be. Default is on the lips of those who predict such things. Ripple effect is the term those who peddle fear like to bandy about. I do not know how the European issue will ultimately play out, but of one thing I am sure there are serious fiscal issues that threaten the global economic recovery and, by extension, the market. The Euro Zone The one issue that launched the concerns we have today is the combined sovereign debt problems of Portugal, Ireland, Italy, Greece, and Spain (PIIGS) in the Euro zone. This is the origin of the default language out there. I, for one, do not believe default for any country in the group is realistic, but now that the press is on, serious impairment of the Euro zone economic recovery (and by extension, the euro currency) is very realistic. If we take default off the table, then the only alternative left to fix the problem is to pay off

the debt, and the only way that can happen is if the countries adopt serious austerity measures in other words, cut spending and raise taxes. The cure itself is a virus that just might spread into non-PIIGS European countries, which could cause a relapse for the somewhat now anemic global economic recovery. In fact, we are already seeing the spread of the virus as Germany, France, and England have announced they too will severely cut spending and raise taxes. This has raised voices of protest in the U.S. government, as this is not a course it sees as viable, at least not yet. The worry is, as I have stated, severe measures to curb deficit spending and debt will undermine both the global and U.S. economic recovery. spending. The ripple effect here is the impact on the euro, immediately, and, longer term, on the U.S. dollar, as the U.S. government is still not making any serious movement toward the same type of austerity measures, although both spending cuts and higher taxes are imminent if the U.S gets serious about curbing deficits and reducing debt. In the near term, the euro should hold on as the European countries begin to tackle their debt problems, and in the long term, the dollar will suffer if the U.S. does not follow suit. To be sure, though, if the biggies in Europe do follow through on their rhetoric to implement severe austerity measures, expect this will dampen the European economic recovery, which will ripple through to the U.S. economic recovery. In reality, this is all good, if it happens, as the world (and the U.S.) cannot have solid economic growth without reasonable fiscal policies. It is tough medicine, but we all have to swallow it. It will choke off both consumer and business

The Euro The recent dramatic decline of the euro is evidence of what can happen suddenly if traders and investors think the Euro zone is failing (see chart below). Ironically, if the economic powerhouses adopt severe policies to curb the debt, the actuality of this in the short term will strengthen the euro, but as the policies take effect, it is likely the euro will suffer as the economic recovery suffers. Thus, on our current path, assuming all things in motion stay in motion, the next 6-9 months should see high volatility in the euro, which makes for a trading opportunity.

Source: VantagePoint Intermarket Analysis Software

Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here

The U.S. Dollar If the euro is volatile, expect the same for the U.S. dollar. However, if the U.S. government does not move toward reasonable fiscal policies soon, it is possible the U.S. dollar could suffer both short and long term. Now, if the U.S. government does begin making serious movement toward addressing our own fiscal problems, it is likely the dollar will strengthen, even in the fallout of the dampened economic growth. It is still, and will remain for some time, the reserve currency of the world, and, if we adopt corrective fiscal policies as Europe is threatening to do, it will become one true safe haven to which money will go in hard economic times.

Source: VantagePoint Intermarket Analysis Software Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here

Another is the market for U.S Treasury Bonds. It is painfully apparent that investors would rather earn little money in more secure investments than take a chance on improving their return on riskier investments, such as the U.S. equities market. I will look at this in a moment.

The U.S.
The Tax and Spending Choice The U.S. government will surely make noise about addressing our fiscal problems throughout the remainder of this year, but the likelihood of Congress passing any measure to either cut spending or raise taxes in an election year is close to nil. This position, however, is only good for another six months. In January 2011, the Bush tax cuts enacted in 2003 are set to expire. Congress will then face a choice let the tax cuts expire, which means a hike in taxes, reinstate them and face the dismay of middle-class voters who believe the wealthy are not paying their fair share, or let some provisions expire and others go forward. Given the propensity of Congress to try appeasing all, the most likely choice is the latter, which leaves more uncertainty in the market which will stay and which will go? The choices made about the Bush tax cuts could have far-reaching effects on the market. The problem we face now is that no one knows which taxes will go up and which will not. This is part of the market uncertainty discussed earlier, and it is a contributor to the volatility we now see in the market. The conundrum Congress faces is that serious pressure is mounting to do something about the spiraling deficit and mounting debt. Given historical precedence on cutting spending, it is likely Congress will lean more heavily on raising revenue than cutting the budget. On the other hand, given the cooperation of both political parties in the 1990s that resulted in budget surpluses and a projected disappearance of the debt, the possibility, no matter how slight, of Congress enacting solid spending cuts along with raising taxes is real.

The Debt Issues of State and Local Governments

The issues of taxes and over-spending are of tremendous importance in the long term. Of more immediate concern, however, is the pressure coming from the debt problems at the state and local levels within the U.S. At best, these issues will require huge cuts to state and local budget programs, meaning hundreds of thousands more added to the

10

unemployment rolls. At worst, these issues could lead to default. If the latter occurs, we could see not just a dampening of the economic recovery, but a serious lapse back into economic sickness. This brings us back to the ripple syndrome. What happens to the U.S. dollar, for example, if the 8th largest economy in the world (California) defaults? When you look at it this way, it makes the PIIGS issue seem somewhat small. Unfunded Liabilities No one talks about this much, but both the federal and state governments are facing an impending catastrophe with unfunded liabilities, such as Medicare, Social Security, and the state-infused, healthcare-rich retirement programs. On a federal level, this problem is further out, but on a state level, the issue is right now and menacing. If any state defaults on its debt, what happens to the hefty, not-fully funded retirement funds that every state provides? The following excerpt from an article in the Los Angeles Times (April 2010) tells a sobering story. The state of California's real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported. To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California. Why should Californians care? Because this year's unfunded pension liability is next year's budget cut to important programs. For a glimpse of California's budgetary future, look no further than the $5.5 billion diverted this year from higher education, transit, parks and other programs in order to pay just a tiny bit toward current unfunded pension and healthcare promises. That figure is set to triple within 10 years and -- absent reform -- to continue to grow, crowding out funding for many programs vital to the overwhelming majority of Californians. Again, if this domino falls, what happens to the line of dominoes supporting the economic recovery?

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Hyper-Inflation
Last year when the U.S. government employed quantitative easing (printing money to buy our own bonds), the talking heads predicted that by now, we would see hyperinflation. Quantitative easing spelled doom for both consumers and investors alike. After all, if the economic recovery took off, this policy would produce inflation upon inflation. Images of people pushing wheelbarrows full of worthless money in pre-WWII Germany spilled out. How would we survive the coming inflationary spiral? The reality of people pushing wheelbarrows full of worthless money is hyperbolic, but the issue of enhanced inflation is not. In fact, it is likely, but, like the ramifications from the sovereign debt issues in Europe, the question is not if, but to what degree? Keep in mind that currently, in the midst of a global economic upturn, inflation has not yet reared its ugly head. Keep in mind that energy costs (oil specifically) hit resistance some time ago and have remained somewhat range-bound on the chart below ($70-$80 per barrel).

12

Source: VantagePoint Intermarket Analysis Software Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here

The Flight to Safety (Private Bonds and U.S. Treasury Bonds)

If you recall, last March and April, the concern for rising interest rates seemed somewhat irrational. When the 10-year Treasury note hit 4%, a form of panic ensued. Yes, the U.S. Treasury was borrowing more, but the point everyone missed in the discussion was that everyone else was borrowing less. Business and personal borrowing had slowed to a crawl. A collapse in private borrowing existed, yet the demand for government and private bonds remained strong. Still, today, bond demand is increasing

13

and the supply is falling. This reality points to one important thing strong demand and low supply equals low yields, possibly for a long time. Is this a bubble waiting to burst? Perhaps. Then again, it could be one salient reason the market goes higher in the near term. Big investment firms and large hedge funds always feel pressure to produce better returns, so out of bonds they come and into equities they just might go. Then again, given the reality of our global fiscal issues, the big boys and girls might continue the flight to safety into low-yield bonds, both public and private, even though the supply is low, which points back to low yields and low interest rates for some time to come. Realistically, expect interest rates to remain reasonably range-bound into the near future, certainly.

Where Are We Going?

One might conclude from what I have written that bad times are imminently coming. This is not my intention. Yes, it is true that I have pointed out some serious potential issues coming down the road, some sooner rather than later, but no, I am not suggesting we are doomed. Rather, I am saying that we all need to be aware of the potential of the issues out there so we can adjust our investment and trading strategies as these issues move closer either to fruition or closer to resolution. Yes, all of the fiscal issues discussed are resolvable. The $64,000 dollar question is: Can Congress and the Federal Reserve follow the Europeans and actually do what is necessary and can each entity do it in a manner that does not over-burden or under-support the fundamentals of economic growth? Aside from the answer to this question, one thing is perfectly clear to anyone who has an eye on the global economic/fiscal landscape: We are moving into an era of constrained resources.

The Era of Constrained Resources

Certainly, the Great Recession combined with the financial collapse of 2008 has opened our eyes to the excesses on both sides of the ideological economic spectrum, the

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excesses that have brought us to this place of decision. We have seen the results of loosening regulations on business (think housing, oil, and financial) and the willingness of governments to spend imprudently is now on display for the world to see (think PIIGS and California). As money is a resource for everyone -- individuals, business, and government alike -- we should now look at it in this light. It is time to understand that, like any resource or commodity, an overabundance of supply means a devaluation of that resource or commodity. In the case of money, governments can simply make more of it when they need to, which is the essence of the fiscal problems coming at us. If this is not disconcerting enough, the bigger issue we have is that because of leveraging and borrowing ease, individuals, businesses, and governments can spend more money then the value of the assets they actually have on their balance sheets. The simple truth of this practice is this: Owing more than your net worth means you have no worth. Now, borrowing and leveraging are healthy things in an economy, but, when either practice denigrates value to little or nothing, it is a problem. It appears the global economic powers are waking up to this fact. We should expect that the major economic powers will embrace this and enact policies that bring us back to fiscal solvency. If you believe otherwise, then put your money under a mattress because the global economy is at a fiscal tipping point. If we continue on this path, at some point, the Chinese will stop supporting the excesses of Europe and the U.S. It will stop not because it decides enough is enough; it will stop because it no longer has the ability to support the excesses of Europe and the U.S. Even the surplus cash of the Chinese is not enough to continue down this road much longer.

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Resources Other Than Money All economies are based on the amount of resources each has access to. Japan has fought two world wars forcefully trying to get more access to resources. Today, it is wealthy enough (at least for the moment) to buy what it needs. China, India, the U.S., and Europe can do so as well, which leads to one other issue coming down the line. This one is not about fiscal insolvency; it is about supply and demand, the heart of any market-based economy. Specifically, it is about oil and coal, the two resources we depend on more than any other to meet our global energy needs. The demand for both oil and coal is on the rise. The U.S, and Europe have long dominated the demand side of this, but now the emerging economies of the world, particularly China and India (the two most populous nations on the planet), are staking their claims to both oil and coal. Despite what many might argue, it is difficult to imagine ramping up production for either of these commodities more than what is going on now. For example, in the Gulf of Mexico alone, over 6,000 oil platforms are currently pumping oil to meet the demand. Now add to that the tens of thousands of wells all over the world on land and sea (think Saudi Arabia, Russia, and Iran), and you have a staggering amount of production. The same is true for coal. The problem lies on the future supply side, as well as the current and future demand side. The global population is growing at an alarming rate, which means we will need more and more oil and coal to satisfy the demand for those resources. Even though the price of both oil and coal has stabilized in a range for now, this cannot last. In the short term (1-2 years), the cost of each will rise dramatically as demand increases and supply remains flat or lessens (if we fall back into recession, the demand will lessen, of course). This, like the pending fiscal issues discussed earlier, could derail the developing economic recovery. This issue has the power to ignite inflation, force consumers to cut back even more on spending, and could force business to cut reinvestment and raise prices because of rising costs. In the long term, reliance on both as primary energy sources is unsustainable. The demand for each will ultimately outstrip the supply. No one can argue differently.

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The answer to this pending disaster is that the world needs to bite the bullet and make the leap in transforming energy dependence from fossil fuels to renewable and clean resources. Slowly, inch by inch this is happening. The bad news is that U.S. is far behind China and Europe in the transformation, and other emerging economies of the world are moving right past dependence on fossil fuels into alternative sources of energy. One bright example is Brazil.

In The End
The one thing that has to happen on a global scale -- and it appears that those in power are now waking up to this reality -- is that a paradigm shift on both fiscal policy and energy production needs to happen, and it needs to happen quickly. If political will cannot produce this shift in thinking, then who knows what might happen to get us where we need to go. Whatever that is, though, it will not be pretty, and the effects will last for generations to come. Given what is known about human history, and what is known about the histories of both Europe and the U.S., specifically economic history, it is clear to me we will find a way to solve all of these issues. The solutions might come more slowly than most would like, but they will come. Hopefully, they will come before we find ourselves mired in an economic mud hole that will require years to extricate ourselves.

Look on the Bright Side

For every problem, there exists a solution. We just have to find it and implement it. In our current predicament, I am certain we will resolve our issues before they take us too far down a dark road. One reason for my optimism is our historical ability as a nation to rise up in a crisis and make whatever is plaguing us go away. It is the indomitable American spirit that has saved us before and will save us again.

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To emphasize this, I give you this chart from my book. This chart graphs all U.S. recession since 1931, and it is the historical precedence for my belief in America and her ability to get back on not just the right path, but a path that leads to unprecedented prosperity. You should note that every recovery has kept the line moving upward. In other words, we have come out of every recession stronger and more prosperous. I see no reason why this will not happen again.

You might ask, then, why discuss the potential issues that could cause great economic harm, if you believe we will not see their potential realized? My answer to that is twofold. First, I am not suggesting some, if not all, of the issues will not come to fruition. Some or all might derail the economic recovery and put us on a dark economic path. I am simply saying that we have been here before and we not only survived but we prospered. Second, let the following quote from my book answer the question.

understand

that

vigilance

and

defensive

positioning are keys to survival and success in the investing and trading world.

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This Special Report is focused on making you aware, so you can be vigilant and defensive in your trading and investment strategies. As well, pointing out the potential damaging issues also brings to light opportunities -- opportunities to make money trading and investing. To find those opportunities, one has to know where to look. My philosophy is to analyze the illness for knowledge, but look to the cure to make money. In the cures for the fiscal and energy issues discussed, opportunities abound. Before generally discussing those, though, I want to give you some words from my father Lou Mendelsohn, a figure of repute in the trading world, and, as it should be, a successful trader and investor

Traders

stay

nimble.

Continually

refine

your

strategies.

Keep abreast of whats going on in the

turbulent markets, as asset bubbles inflate and burst. (Is gold really the next real currency or is it just a temporary asset bubble that will suck unsuspecting traders in near the top?)
His words speak truth. The times call for awareness and agility in our strategies, and, perhaps most important, we need to select our opportunities not on what the herd is doing but, rather, select our opportunities based on what we know.

Investment/Trading Opportunities
Financial Sector The first opportunity to look at is the global financial sector. Here is an opportunity just beginning to bloom and it is the U.S. and European financial regulation just now coming into play that will jumpstart it. Just like a misbehaving child, some form of discipline is needed to get the child in line. The global financial sector has misbehaved, and the regulations just passed in Congress and in the governing bodies in Europe will exert some badly needed discipline. Yes, some might argue (as they will) that the regulations

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will kill the profitability of banking. In some cases, it will certainly reduce the profit potential of some banking enterprises, but in the end, regulations will curb excess behavior, to some degree. More important than whether the regulations are too strong or too weak is the certainty the new regulations bring to the market. Many in the financial industry will tell you: Uncertainty is worse than rules. Just tell us what the rules are, and we will adapt. As well, with reduced risk (which is what the new regulations purport to do) comes confidence -- confidence to invest in what once were highly risky investments. Keep in mind as well that business, government, and individuals have entered into an era of constrained resources. Or, another way to express it, a period of deleveraging from excesses of last three decades. Cleaning up balance sheets, reducing debt, building cash reserves all contribute to a healthy and expanding financial sector, and a healthy and expanding financial sector is the lifeblood of a growing economy. Forex Currency trading always provides opportunity, as money is always on the move. Obviously, we will see more near-term opportunity (volatility) with the euro and the U.S. dollar because of the uncertainty about how global governments will respond to the fiscal issues discussed. This trade is a gimme. What about the Canadian dollar though? Look at this excerpt from a recent CBS News report, and then look at the VantagePoint chart below that. Clearly, that money is on the move.

The 20 world leaders at an economic summit in Toronto next weekend will find themselves in a country that has avoided a banking crisis where others have floundered, and whose economy grew at a 6.1 percent annual rate in the first three months of this year. The housing market is hot and three-

20

quarters of the 400,000 jobs lost during the recession have been recovered.

Source: VantagePoint Intermarket Analysis Software Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here

Technology If the major global governments can keep us off the dark, economic path, then expect a strong and robust economic global recovery. As always, in this, the Age of Technology, technology will lead the way. For example, synergistic movement is happening in the telecommunications realm, specifically the Internet. Bandwidth depletion coupled with the rise in downloading applications (think I-phone and I-pad) is leading us to a new age of innovation in networking hardware/software. Cisco, for example, released a new router last March that it says will forever change the Internet. Putting aside the 21

hyperbole of that, the fact is that the router is faster than anything ever produced, and since routers are the traffic cop of the Internet, fast allows for bandwidth to be utilized more efficiently, which addresses the problem of bandwidth depletion. How fast is the new router? Here is a quote from the web site Gadget Lab.

About a million times faster than your typical cable modem (literally). at the same time.
Biotechnology is another opportunity waiting out there, if the global economic recovery gets into full swing. The quote below from the international Organization for Economic Co-operation and Development points to where we are headed.

Or, fast enough to allow every

man, woman, and child in China to make a video call

Scientific advances in biotechnology are ushering in a new era of medicine: a targeted therapies and personalized medicine are coming of age. Traditional medicine variability population. manages without between disease taking through of or standard existing of treatments, account

individuals

groups

Personalized medicine, in contrast,

adapts treatments to the profile of each individual. This revolution in biomedicine is due, in large part, to the discovery of biomarkers.

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Energy So much is happening technologically, in every realm, but one can reasonably expect that more will happen sooner in the energy sector than just about anywhere else. Simply look to the utter ineptitude of the oil industry in the most recent, horrific Gulf of Mexico oil spill. It is clear to anyone without blinders on that the oil industry has spent little to nothing on technology to repair a leak a mile below the surface of the ocean, and to clean up the mess that leak has wrought. Junk shot, top kill, and every other hopeful thing thrown at the leak has not worked. Expect a near-term boom in this area, as well as in the area of oil-spill cleanup. The oil industry cannot afford another BP style leak, so expect it to move quickly on updating the 1970s oriented technological tools it now relies on in these disasters. Aside from the immediacy of the above, a sense of urgency also exists in developing alternative energy sources. Billions upon billions of dollars are moving into the innovation and development of new energy sources. The most immediate are solar and wind, but natural gas, biomass fuels, algae-based fuels, and geothermal energy are moving up fast. The investment keys here are hardware and infrastructure. No matter the fuel, we will always need a way to either capture it or manufacture it and then deliver it. This opportunity is both near term and long term, as depicted in the excerpt below from an article on the Brookings web site.

Probably

the

most

promising

application

of

renewable sources lies in generating electric power. The four systems most commonly put into the renewables rubric are variants of solar energy (thermal or photovoltaic applications), biomassderived fuels, geothermal resources, and wind power.

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Conclusion
As a nation, we have always faced crises -- economic, fiscal, natural, and man-made -but not one of those catastrophic crises (world wars, threat of nuclear annihilation, economic depression, huge government debt, or terrorism, for example) has kept us from ultimately moving forward to greater prosperity. Granted, what we are now facing on the fiscal and energy fronts could easily temporarily derail or postpone for many years a sustainable economic recovery. Then again, the major global powers as a unit may simply do what is necessary to work our way out of massive deficit spending and hugely destructive debt. This alone potentially could push back any economic recovery for some time. From a market perspective, I believe we should expect in the near term what I said we should expect in the near term last year.

The stock market dropped so far in 2008-2009 that a full recovery will take some time, and it will be bumpy. In the short term, it will rise fast to a point, and then it will recede again. This cycle will repeat, and over time, the frequency and amplitude of the ups and downs will lessen. In the long-term, it will gradually rise to its former height, and as the new economy kicks in, excitement and optimism will drive the market higher.
Nevertheless, in the near and long term, trading and investment opportunities abound. Thinking back to my dads advice, stay nimble, stay aware, refine your strategies, and dont get caught up with the herd, as this will probably get you trampled. Keep your eye on what the major governments say and do, and then try to stay one step ahead with

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your money decisions. Will they turn to gold as an answer? Or will the Chinese yuan become the new major currency?

Source: VantagePoint Intermarket Analysis Software Call now and you will be provided with FREE recent forecasts that are up to 86% accurate 1-800-732-5407 If you would rather have the recent forecasts sent to you, please go here Finally, no wizard will magically lead you to the best position for your money in these uncertain times. Only you can do that, but to do that well, you need to be at the top of your game, which means knowing all that you can know, understanding what you know, and comprehending how what you know and understand fits into the context of the 25

moment. You need to make good choices. So, in that light, I have excerpted one more quote from my book, The Economic Storm.

The point is that you should rely on your own abilities to find the investments that work for you, in your time frame, and within your pre-defined strategy. Yes, you should listen to experts, but remember, they are just people who are investing, too. As I have stated before, if you do your homework, understand the economics, and practice safe investing, you probably know as much as they do about how to invest wisely. Their advice should be just another piece in your overall pursuit of information that will make you a better investor.
Even though I have laid out potential hazards we all face, I am optimistic about our near-term and long-term future. Even if you are not as optimistic as I am, you should, nevertheless, pay attention to where we are now and where we might be headed fiscally, economically, and on the energy front. Keep in mind, your money needs you to be on top of a world seemingly spinning out of control at times. And if you believe I am crazy and that the market is doomed from our fiscal excesses, gold somewhere around $1,250 an ounce awaits you, or short-term Treasuries paying close to nothing are calling you. If neither of these appeal to you, then your mattress will work, assuming you still have one. Otherwise, get to work.

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THE TRADERS COMMUNIT Y

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