"The operations of many energy partnerships have nothing to do with the price of crude and natural gas; they only need to have demand to move and process crude oil and natural gas rather than to pump it out of the ground," explains Neil George.

In his specialized advisory services, The Partnership, he looks at Kinder Morgan Energy Partners (NYSE: KMP) and Kinder Morgan Management (NYSE: KMR).

"Midstream partnerships--those that operate pipelines or storage and processing facilities segments as well as those that invest in these segments--are among the most stable distribution payers.

"And, more importantly right now, they're among the most stable investments in what's become a treacherous stock market.

These middlemen, in between the producers and the consumers, are perhaps the best hedge for your portfolio as they continue to generate hefty cash flows for investors.

"Whether the broad energy market is up or down, these partnerships continue to be all-around successes. Kinder Morgan Energy Partners and Kinder Morgan Management, are Foundation holdings in our portfolio.

Two weeks ago, in a post entitled, "Bonds: worth a shot in the near term?" I suggested that bond prices had fallen too far, too fast, and were due for a short-term technical bounce. As evidence, I cited oversold momentum readings, the nearness of long-term support levels, and heavy volume in the iShares Lehman 20+ Year Treasury Bond fund (AMEX: TLT), a proxy for the overall market.

Since then, prices have rebounded somewhat, with the exchange-traded fund rallying from $83.12 on June 14th to $84.30 at today's close. However, while I sense there could be a bit more upside in the near term, today's statement following the latest meeting of the Federal Open Market Committee, the policy-making arm of the Federal Reserve, gives cause for concern.

In essence, the FOMC signaled that policymakers still consider the threat of rising prices to be the central bank's primary focus, and suggested members see no "sustained" moderation in inflation pressures, according to reports. Those words triggered a round of selling in fixed-income markets, amid worries that liquidity might be constrained and short-term rates could be headed higher in future, contrary to expectations.

With my longer term view on bonds remaining decidedly negative, today's unhelpful Fed action, together with the fact that prices are no longer at oversold extremes, suggests that the upside is probably limited in the near term. Under the circumstances, it makes sense to shift to a more defensive stance.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

The current account balance is a broad measure of foreign trade that includes trade in goods and services, investment flows and foreign aid and is regarded as the best measure of America's international standing.

The trade deficit was down 6.5% to a $208.7 billion gap in the first three months of this year. This comes after a significant narrowing at the end of 2005, when the Commerce Department reported a record trade deficit of $223.1 billion.

While this is encouraging, the deficit is still near its all time high and analysts believe this quarter will prove to be another record, as will this year.  This could explain why the markets didn't react much to Friday's favorable news (that included a second report indicating that consumer sentiment in early June rebounded after its big drop in May), especially in light of continuing high oil and commodity prices.

The market is also still getting to know Bernanke.  Other than Greenspan's "irrational exuberance" comment from which the market still hasn't fully recovered, Greenspan used discretion in his comments.  Bernanke, on the other hand, seems to have a looser mouth which caused one of the most volatile weeks in the market in years.

The yield curve continues to be inverted, indicating that the market expects a rate hike not only in the June's FOMC meeting, but also another quarter-percentage-point at the beginning of August.  An inverted yield curve preceded each of the past four U.S. recessions.

All this begs the question whether the latter part of the past week in the market is sustainable.  Since nothing has changed fundamentally and since this week's volatility definitely showed fears of higher inflation and further tightening, it is possible that the market isn't showing sustainable strength.  Investors might soon be looking at safer instruments such as cash and commodities if inflation keeps ticking higher.  Perhaps a look north of the border at the commodity heavy Toronto Stock Exchange is something worth considering.