( For those of you who don't know who Alfred is, he has his own magazine, Mad Magazine, to be exact.... :- ) )

Most investment advisors you hear in the US look at the Dow in terms of the US domestic market and mention how great we are all doing; unemployment low, interest rates low, high productivity, no war, etc.

However, very little is viewed past our borders, and since about 30% of our economy is directly related to overseas markets, problems there will eventually affect us. The Dow climb to 9000 was accomplished with good trade arrangements and therefore earnings for US companies. This is now slowing, and in terms of Asia, stopping. Gold is low as a direct result of the US dollar doing so well.

If trade continues to slow and our overseas markets diminish, earnings will fall, and eventually stocks will fall. How much is the question, and in my opinion, that depends upon the amount of deterioration in foreign economies, especially South America, which hinges on Brazil. If Brazil holds out and doesn't devaluate, then the rest of S. America will hold up and still trade with us. However, if Brazil continues to lose reserves, and they are low now, then they will devaluate and so will the rest of S. America and there goes another 20% of US trade, similar to how dealing with Asia is now. Trade vessels will go south, empty of US goods.

At that time, the dollar will surge, gold will drop, and we will go through another short cycle like last fall when Indonesia collapsed. The recent IMF aid may prevent this, but the possibility is there. After a short time, the overwhelming trade deficit ( now at record levels ) would be too much to bear, and profits and earnings for many US stocks would wither and stocks would fall. US productivity would decrease, unemployment would increase slightly, interest rates would go up, and a new bear attitude would take over the market as in 1973, and most small investors would be the last to figure it out. Hedge fund problems ( from 20:1 leverage ) or an increase in personal bankruptcies could put more pressure on the banks. About that time, as in 1973, gold would be reborn, and gold stocks and funds would be the place to be.

This scenario does not require a war, oil shortage, impeachment, nuclear attack, ozone depletion, or any other disaster, such as Y2K. Just basic overextended economic forces. Any difficulties with Y2K would magnify the bad parts.

Just a semi-learned opinion.

The smart money is betting on a big correction. The DJIA has been propped up for the last l0 days by the huge investors, ie the Mutual Funds, The Banks who own certain equities, the Insurance companies who also own certain equities, the Hedqe funds who own crazy options and other large individual investors who have hugh profits in their positions, ie l9.00 for Nations Bank ( now Bank America ) , Gillette at l4.00 and l3.00 Coke. These big players are unloading these overvalued stocks to the little guy who has heard nothing negative about the stock market for the last l0 years. THEY KNOW IF THEY STAY IN LONG ENOUGH........

It has been my unfortunate experience that when the distribution process is at this stage, it is better to not be in the market in any shape form or fashion. Add to this the fine tuning by AG, RR and the central banks of the world on behalf of their cronies or customers or citizens and there is absolutely no reason for anyone to be investing in this market.

Speculation is ok, if you can take the heat and losses.

NEVER LISTEN TO ENVY FOR INVESTMENT ADVICE

Your comment:

The thing that made up their minds, I believe, is when I told them that if the markets crashed, they would probably lose half of their money - for some weird reason, that seemed to comfort them, they seemed to be okay with losing half of their investment in the equities markets *shrug*. So there you have it direct from Mr. and Mrs. regular investor, if they are typical, then the equities could stay up their until the cows finally come home.

I just logged on and noticed few had responded to your question of Eureka.

Well of course, he discovered mass displacement...something to do with measuring the purity of the King's gold...but all that is rather incidental to the shout of Eureka; what he had actually discovered was the combination of the lever, the screw, and mass displacement in *combination*- and he saw that 2000 years hence one could have a great deal of short term fun by using leverage to screw the investors out of a great deal of money while letting the mass displacement of gold sink forcing equity prices to rise.

A stoke of genius by anyone's standards. When the king heard of the idea his eyes glazed over in rapture. He appointed some of the same boys that came up with that great rolling horse idea to carry it forward in time.

I believe all this is documented in some rather obscure book. I forget the name...something like Leystikoteron

My point was not that we utilize the KWH as currency, per se, but that we explore the possibility of using it to satisfy the *Unit of Measurement of value requirement of currency. Right now, as I read and learn here, the SDR, based on some number of grains of gold carried to many decimal points is the Unit of Account ( ? ) . If it were the KWH, then all things would be reduced to their abilty to do work.

For me in Southern Nevada, with a KWH rate of USD .035/KWH, and gold at 292.30, that would equate to my 1 oz of gold being worth 8,351 KWH. My friend, living in Vermont, paying .16/KWH, however would find his ounce of gold only worth 1,827 KWH.

I'm not sure where all this is leading, but it's all Dabchick's fault for getting me to look at the price of gold without the currency filter :- ) .

( Thanks Dabchick ) .

http://www.economist.com/editorial/freeforall/current/index_sf1152.html