The Stock Market Bubble Will Burst

Since March, the U.S. stock markets have skyrocketed. And for Wall Street there's even more good news: the U.S. government declared the Recession over as the Gross Domestic Product jumped 3.5% last quarter, up from negative numbers.

But if you've been reading this website, www.saneramblings.com, you know the GDP rise was based on massive government stimulus money and other programs such as cash for clunkers and its equivalent in the low end real estate market. It's not real.

Yet, the stock markets have been shooting through the stratosphere since March which coincidentally is when the Fed sharply escalated its printing of money out of thin air. That money printing continues today. Along with the rest of the staggering sized stimulus, we are awash in dollars.

Where is most of that money going? Into wild speculation. It's flooding the stock markets and chasing commodities such as gold, silver, oil and copper and other speculative investments such as junk bonds and low end real estate.

This is going to end badly for there is no substance behind it. The next crash will be in commercial real estate and before we're done, the stock markets will crash as well.

Already, the dollar is sinking against every major currency, and not just the Euro and the Yen but even the Brazilian Real. Just since January, the dollar has lost 1/3 of its value vs. the Real as fears of U.S. hyper-inflation steadily spread across the world.

What can you do to protect yourself? Cross train so that you have valuable skills to offer employers. Educate yourself in fields that will remain strong such as health care services or residential real estate management.

And if you can afford to, acquire assets long known to be effective inflation hedges, such as rental residential real estate in prime communities, for we all have to live somewhere. And buy one ounce or even 1/10 of an ounce gold coins. Buy and store them. If we are lucky, they will never be needed and become over-priced keepsakes.

Most important of all, enjoy your life and bring some joy into the lives of others. And if you can afford to, make charitable contributions to help others in need. As people did in the Great Depression, together we will get through this mess.

Dick