Just recently, I ran across a book titled, "Faster - I'm Starving". It's a cook book about cooking fast meals. With a couple of interest rate cuts in so many week, seems that the US Federal Reserve might be reading a book similarly titled, "Faster - I'm Sinking". Evidently that would be a "cook" book about liquefying slow economies.

The Fed's most recent half percent interest rate cut did seem to bring liquidly to the markets. The markets responded the week previous to this last week with the Dow Jones Industrials (DJIA) strengthening 4.39%. However, that glow dimmed this week with the DJIA off 4.40%. In concert, other equity markets followed suit. We're seeing up and down equity valuations! All indications are that we'll be seeing continuing volatility for at least six more months. That said, I do feel that when this year draws to a close, we may be enjoying only a slight increase of average market valuations.

This feeling is somewhere between those who expect a major decrease in market valuations and those who look for a new bull to prance on the scene. Some comments are to the effect that markets are overvalued and will decrease to more reasonable levels. Other comments suggest that both government policies during this election year and easing by the Fed will pave upward paths. Historically, the years following election years are when problems in the economy are addressed, so my guess is that problems will be "swept under the rug" this year but bad news will come in 2009. Regardless of my feeling that no great downward nor upward trends will be in evidence, the volatility makes the equity markets risky; capital preservation will be my primary objective this year.

Addressing this year, there are a number of opportunities. For example, I made about 22% in 2007 simply by having a bank account in Canadian dollars. That was no speculation; it was merely having money in a bank account. Now, a good idea for 2008 is similar: invest in ETF "money" including the Swiss franc (FXF) and the Japanese Yen (FXY). A bit better is a currency account at Everbank (http://www.everbank.com/) in which investments can be made in a wide range of foreign currencies. Everbank's "Pacific Advantage CDs" which combines four "Pacific Rim" currencies looks particularly interesting. Also, Everbank accounts are insured by the FDIC, so their accounts include bank insolvency insurance. Many foreign currencies have earned double-digit returns in the past year, when measured in US dollars. Those currencies are now coming off corrections and should offer good profit potentials.

My positive evaluation of precious metals has certainly paid-off. Over the past twelve months, gold is up about 37%. That just might be the trend "lift-off"! An experienced investment manager who has an excellent record for being correct in identifying major trends says that gold is one of the most important investments that we can make at this point. That is simply because the world is awash with paper money; many of us are now looking for a currency alternative. This manager's suggested investment vehicles for gold are the gold bullion ETF (GLD), and the gold mining ETF (GLX). In addition to these, I like the Central Fund (CEF), US Global's Gold and Precious Metals Fund (USERX) and the Tocqueville Gold fund (TGLDX). CEF invests in gold and silver bullion, USERX invests in bullion and mining companies, and TGLDX invests in medium and small producing mines.

In my previous "Observations", I mentioned a number of other commodities which could increase in valuations. It recently came to my attention that natural gas could markedly increase in price. My reaction after consideration was to invest in the United States Natural Gas Fund, L.P. (UNG). That was timely because natural gas prices did increase almost seven percent last week. In all probability, natural gas has some running room. Also, as I said, agricultural commodities should do well. One fund that has a somewhat whimsical symbol isMarket Vectors Agribusiness ETF (MOO). I haven't investigated this as I am investing in the agricultural sector with investments in fertilizers including the Potash Corp (NYSE: POT ), Yara International (OTC: ADR-YAR) and Terra Nitrogen Company, L.P. (NYSE: TNH ).

Of additional interest may be that one of the world's all-time investing legends, Jimmy Rogers, sold his $15 million Manhattan town home and moved to Singapore. The fund he managed beat the markets by 89 to 1. Investors who followed his commodity recommendations have made fortunes. Now, he leaves with another suggestion; the commodity bull is running again and will probably run for several years.

At this point, my observations may be overly focused on gold and other commodities. However I believe that it's highly probable that commodities will rise in US dollar terms because demand for commodities is increasing while the US dollar is weakening. Of course, there's no certainty in any markets but the force is presently with commodities.

As I am an investor, not an advisor, I make these observations without any suggestion of what others could or should do. If you're also an investor, perhaps my observations will be of interest for possible more specific investigation. But in no regard should these comments direct anyone's investing activities.

Also, I sign-off with a Year of the Rat "Happy New Year". The Year of the Rat which started on February 9th is the best year of the Asian zodiac for businesses and for people who work hard and are thrifty. More importantly, this Year of the Rat is of the special Earth Rat. ThisEarth Rat year will be attuned to new beginnings and will be an auspicious year in which to start new ventures; there will be many opportunities success. My best wishes to all for a great year!