the Dow Jones Industrial Average was down almost 1,000 points but don't let the mass media con you into beleiving it was a bad trade or some type of glitch. Todays market plunge was sure fear of the Contagion possibilities due to the Greek Debt  and European crisis.This market has been wantong to lock in their gains for quite some time now and today was a perfect day to hit the sell button. The worl markets are flying to any type of safe haven they can find as the Greek crisis WILL spread to almost every single equity and even government.

     What is ahppening is the same scenario that we experienced in the bad mortgage crisis, except this time it involves world governments and their soveriegn debt. This will not end happily and will drag on for some months to come as nation by nation experiences liquidity problems, rising bond yeilds. United States equities will be dragged into the fray as it is now a one world commerce society. short-term credit markets,such as the market for three-month Libor,are begining to show signs of stress and corporate bonds are tumbling.Cash will be king once again as the markets correct possibly lower than this time last year. In my opinion trade the short side etfs, faz,vix,bear etfs etc

DOW Drop - Greece, Europe plus Commercial Real Estate Crisis, Are You Prepared?    by S. Peters

DOW down over 350 points today all in 30 minutes. I have been warning about this for months. Is this the beginning of another financial meltdown?

To fully appreciate what it might take to ignite another financial meltdown, we need to get a clear picture of where we are today. If the economy was growing from a base of solid economics, this topic would be nothing more than speculative thinking. If you have not believed what I have written in the last three months about this...maybe you are willing to listen after today. Without going into pages and pages of detail a quick survey of current economic conditions are warranted.

The stock markets and financial markets in general seem to be trying to hold up in spite of what is generally bad news. There is this sense that everything is on the edge....like it is waiting for something to push or pull it one way or another. Do you feel it? There is nothing anywhere on the near term horizon that looks strong enough to pull the market up with any real, continued, well supported recovery. Unfortunately, if there was a direction that the facts would be pointing to...it would be for a decline. If you have not believed this even earlier this week, you have to be considering it after today. Or you are just hiding. This recovery never had any real legs. There is not a stitch of evidence suggesting anything else. And there any number of ways a correction could start.

Of course all the headlines today will be screaming Greece and Europe. Not far behind Greece is Portugal and Spain...and others, Italy, Ireland...more. But for a moment, lets put these enormous problems off to the side. These countries may very well be the flame that ignites the fire....but if they were all the fuel, then I believe there would a decent chance that Europe and the rest of the world could keep this to a small grass fire. To have it get completely out of hand...in my opinion, it needs a big dose of US domestic fuel. Lord knows there is more than enough kindling to go around...

For example, let's say another wave of increased home foreclosures begin to show up. It has. In spite of the U.S. Governments 75 billion Home Affordable Modification Program, foreclosures rose again in April and are on course to exceed the 2.8 million initiated in 2009. Over 932,000 filed in the first three months of 2010. In addition, there are a great number of adjustable mortgages coming due this year. This is a huge problem, but there are few surprises here. Are there any other potentially explosive economic issues hiding barely below the surface of our collective attention?

What About Commercial Real Estate?

This is really going to be the story over the next year or two. The largest bankruptcy in the history of America happened in 2009 when the huge commercial real estate-mall owner/operator General Growth declared bankruptcy - roughly 9.7 billion dollar bankruptcy. To begin to understand this, Wikipedia lists the GDP of over 191 countries - 69 of which are smaller than this one bankruptcy.

There is much evidence that the only reason we have not seen wide spread commercial defaults is because the market is being artificially supported knowing that the combination of residential and commercial defaults would crush the U.S. economy taking most of the world with it. Lenders are holding on looking for government bailout funds while hoping and praying for a turn around sufficient to get them back in the black. It is a tenuous situation.

On February 11, 2010, the Huffington Post ran an article titled: Elizabeth Warren Warns About Commercial Real Estate Crisis, 'Downward Spiral' For Small Businesses and Local Banks.

"There is a commercial real estate crisis on the horizon, and there are no easy solutions to the risks commercial real estate may pose to the financial system and the public," says a report issued by the Congressional Oversight Panel, the bailout watchdog led by Harvard Law professor and middle-class advocate Elizabeth Warren. It went on to report:

"Over the next five years, about $1.4 trillion in commercial real estate loans will reach the end of their terms and require new financing. Nearly half are "underwater," meaning the borrower owes more than the property is worth. Commercial property values have fallen more than 40 percent nationally since their 2007 peak. Vacancy rates are up and rents are down, further driving down the value of these properties."

There are many stories about this if you go looking for them. This may not be main stream quite yet...but it is widely known by those of us that follow these trends. Many more will know before the end of 2010.

Eric Pryne, a business reporter for the Seattle Times wrote a great piece on the commercial real estate market. He tells of a project in Seattle that pretty well summarizes the US market today:

In 2007, developers excavated a deep hole in downtown Seattle at Second Avenue and Pine Street for the foundation of a 23-story luxury hotel and condo tower.

They filled the hole in 2009.

That pretty much captures the kind of year it's been for commercial real estate in the Seattle area. The development pipeline dried up. A few projects were halted mid-construction.

Office and industrial vacancy rates soared. Rents fell. Condo developers, desperate for sales, resorted to auctions and big price cuts to unload units. Banks foreclosed on some properties.

He went on to say that "2010 won't be any better, according to year-end forecasts by developers, brokers and other industry insiders.

"I think we have just seen the tip of the iceberg on what's coming," said Tom Parsons, senior vice president of developer Opus Northwest. Jim DeLisle, a University of Washington professor of real-estate studies, said he fears a 40 to 60 percent drop in commercial real-estate values from their 2007 peaks.

Not good...and not confined to the US borders. Only weeks after Dubai declares to the world that it is bankrupt, it christens the tallest building in the world. I could go on and on with example after example.

Commercial Real Estate aside, perhaps the worst sign of all is our own government's complete lack of fiscal restraint with what can only be characterized as wild and undisciplined spending. The trillions of dollars of freshly printed fiat money at outpaced anything we have ever witnessed in the history of the U.S. With every additional dollar they create and flood in the economy, the farther away we are from knowing what will happen next. It seems obvious to me that they do not know what to do and are just working month to month. In truth they have very few options left, most all have been spent.

And they are not alone. Virtually every economy in the world that had any semblance of stability printed billions of their own currency as a global stimulus ensued in the aftermath of the economic crisis of October 2008. From Viet Nam to Dubai to China, Europe and many, many more governments went to their Treasuries and Central Banks and authorized them to print more currency in an aggressive attempt stave off economic collapse. The world's economies are on edge.

With global economies on shaky ground, and investors around the world hyper nervous just waiting to push the panic (sell), button, any combination of economic - political - environmental situations could trigger fear which moves to selling which moves to panic and a global crash like 2008 or worse.

It may in fact have already started. Smaller western style economies are already failing. Iceland led the group. Next it was Greece. This does not take into account money the International Monetary Fund has given to countries on the brink of economic collapse. Well respected Roubini Global Economics (RGE), commented on April 20, 2010:

"Public debt sustainability has exploded as a serious issue in advanced economies, most notably in the eurozone's "PIIGS"-Portugal, Italy, Ireland, Greece and Spain-but also in many larger OECD economies, including the U.S. These issues within the Eurozone stem primarily from a loss of competitiveness, high wage growth and labor costs which outstripped productivity, undisciplined fiscal policies and, crucially, the appreciation of the euro between 2002 and 2008."

International Monetary Fund and the Eurozone countries have come under increased criticism by the markets and its own citizens around their in ability to deal with the continued debt sustainability. They target Spain, which is not yet in the minds of many typical citizens still focused on Iceland and Greece as the next country with potentially worse economic and labor market problems needing international help and strategic economic and political reform not likely to happen. Its citizens would have to willingly accept a greatly reduced standard of living. They won't do this on their own. No matter - they will be forced to in the near term as will so many countries trying to live so very far from their means.

So follow the progression...the worlds economies were on the brink of economic collapse in late 2008. They all printed large amounts of un-funded money and infused their economies with it artificially stimulating economic growth. This debt is still out there and the support it provided is now moving through the system and losing its affects. From a balance sheet perspective, all of these economies, the US included, are worse off than ever before...and we are approaching that same place...again. Is another round of stimulus funding an answer? It cannot go on forever. Sooner or later, spending or own money that we are borrowing from ourselves beyond what we can ever pay back just can't work. It is not wrong to flatly state that we have never been here before. We have not. This is all a grand experiment and I am certain we will have our answers sooner rather than later. Maybe much sooner.

These countries share similarities to the US economy. They all of course had run up so much debt, that it became apparent to the rest of the world that they would never see their money so they stopped lending. These economies were so far underwater, that without additional loans to fund their debt, they collapsed. Social programs and other free spending habits of politicians who had no idea what the word 'no' meant bankrupted these countries. These politicians had the power to protect their citizens to be sure, but the citizens themselves shoulder a fair amount of the blame. Many apparently believe(d) that the government was a source of unlimited funds that would never circle back and hurt them individually. Sure.

What is the point you ask? The point is we are being offered some time to take some steps none of us had probably even considered up until 2007 or certainly 2008. Real value will become paramount. Unfunded, inflated, fiat "systems" will be exposed to steep losses. You need to transition your thinking. Thinking more about what holds value when everything we thought about value changes. Then you need to quietly acquire as much of this as you can. And, if you are smart about it, you focus on things that minimize losses should we be wrong about all of this and an economic miracle takes place and we get back on a solid track in the next few years without drastic changes.

Conclusion: I want nothing more than to be wrong about this. Who doesn't want the US and global financial systems to correct without real serious pain. They are trying. We are witnessing the greatest 'de-leveraging' the world has ever seen. Unfortunately, this is only necessary on the back end of the greatest leveraging the world has ever seen. You should be transitioning 10% to 20% of what you own under the broad term "investment" be in hard assets, real goods. Things that maintain value under any scenario and in times of scarcity would put you in a position to have what others wanted and needed. Consider it a form of 'wealth insurance'.

Steve Peters combines 24 years of equities, international business, gold trading and gold broker experience to help new and/or uncertain precious metal buyers avoid the mistakes he has seen so many make. To learn more, go to http://goldinsidertraining.com