Regarding bull or bear. We may have both. A bull in price and a bear in value.

When the DOW went to 14,000, it set a new price high but, the value, what you could buy if you sold the DOW at 14,000, wouldn’t buy you what it would when it peaked in 2000.

We could see DOW 50,000 within a year if the G-20 meeting were to announce a new global currency but, since a loaf of bread might cost $1,000 and a barrel of oil $10,000, you won’t have as much buying power even though the DOW chart would look like a bull market was in place based on price.

We have to stop thinking about price and start thinking about where you will be able to preserve the value of what you have saved and/or invested.

A company with $100 million in foreign sales and earnings now, may see that same amount of sales and earnings, when converted to dollars after a dollar crisis, be $1 billion or even $1 trillion. Yes! It can get that bad. I am not saying it will but it could if the world decides to end using the dollar as the world’s reserve currency as some nations are now calling for.

If China and perhaps Japan could figure out how to extract the wealth they have invested in the US, I believe the dollar as a world reserve currency would be kaput. But at what point might they decide to cut their losses, like a bank would on a bad debt? They may decide that to continue this folly of constantly providing credit to the US to be more risky than what they would lose by allowing the dollar to collapse.

http://investment-blog.net/the-coming-us-dollar-crisis/

Also, don’t forget that even though you lost value and couldn’t buy as much when the DOW was at 14,000, you got taxed on a “gain” if you sold at the peak. That means you not only lost some value due to inflation reducing buying power but, had even more taken away in a tax on a fake gain.

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• Can the U.S. have hyper-inflation?
• Stock Market and the Election
• The US deficit is about 10% of GDP and the gross debt of around 11 trillion is closing in on 100% of GDP.
• This recession is crashing U.S dollar

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