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<\/a><\/p>\nWhat happens when the interest rates start to spike?\u00c2\u00a0 Mortgage and credit cards rates will mostly spike.\u00c2\u00a0 This will put more pressure on homes that are having trouble paying their mortgage.\u00c2\u00a0 This will increase foreclosures.\u00c2\u00a0 The rate spike will also reduce the amount that banks are making off of the interest rate curve.\u00c2\u00a0 Our government will be forced to pay higher rates on our debt.\u00c2\u00a0 In order to cover this increased cost, our government will have to increase taxes and cut spending.\u00c2\u00a0 Our country will not be able to afford the coming interest spike in any way.\u00c2\u00a0 Our stock market will feel the most pain.\u00c2\u00a0 Investors will gladly take higher interest rate yields over being in a risk stock market.<\/p>\n
EURO<\/h2>\n
The Euro\/USD is currently resting on support.\u00c2\u00a0 This means that the Euro has fallen and the Dollar increased over the past few weeks because of the financial fallout from the bailout last of Greece and potential need to bailout other countries.\u00c2\u00a0 This relationship tends to push the Oil Price around.\u00c2\u00a0 As the Dollar gets stronger, the cost of Oil goes down.\u00c2\u00a0 As the Dollar became weak we saw a lot of countries demanding to switch the payment method out of Dollars into something stable.<\/p>\n
Oil<\/h2>\n
Even though BP is killing the entire Gulf and usually leaks cause supply concerns,\u00c2\u00a0 it is the Dollar relationships that is driving the Oil Price.\u00c2\u00a0 If the Euro rallies, then Oil will rally as well.<\/p>\n
Gold\/Silver<\/h2>\n
All commodities have fallen off with the strength in the Dollar.\u00c2\u00a0 Gold and Silver have followed with all commodities but has shown hidden strength.\u00c2\u00a0 This is most likely because Gold\/Silver are not just a commodity but also a reserve currency of the world.\u00c2\u00a0 As the world produces more fiat currencies investors are flocking to an asset that will maintain it’s value as all currencies decrease in their purchase power.\u00c2\u00a0 It is not likely that the Euro will fail in the short term, but if one of the countries defaults then most likely the Euro will lose even more ground against the Dollar.\u00c2\u00a0 In these troubled times traders and investors are looking for stability to out last the financial crisis storm.<\/p>\n
If we can get any stability out of the Euro Zone, then we should see a nice pop in the broad market, but until then let’s hope we can remain in consolidation above 10k.<\/p>\n
China -HSI<\/h2>\n
China’s Broad market is off from its highs is April and resting on key support levels from February.\u00c2\u00a0 If China continues to fall, then the rest of the world may follow along.<\/p>\n