Bull or Bear?  That is the question.  For those of us who invest in the stock market, it is the eternal question.  For the record, I spent the first 20 of my 30 year career as a total bull - meaning I loved the market.  Then in late 1999, I saw the tech bubble bursting, you know, all those dot-com companies that had lots of hits and no profits like Groceries.com or Pets.com. I wrote a newspaper article advising everyone to sell and had they listened to me, many of them would be a lot better off today.  The Dow Jones was over 14,000 and the Nasdaq was nearly 6000! You need only look at the markets this morning to see them still lower a decade later, in order to understand that in spite of last year's rally - the past ten years has essentially been wasted.

Now, there are two kinds of investors in stocks: traders and long term investors.  Traders can make money in the stock market good or bad and long term investors are just getting hammered. That does not mean that I recommend to anyone to become a trader.  Unless you are prepared to spend your entire day ready to pull the trigger and follow all the data and trends, it is a good way to get pummeled. Of all the expert traders out there, only a small percent are right - about half the time! With all of their supposed knowledge, the average guy doesn't stand a chance.

Right now, and by that I mean the next few months, the stock market might hold steady or go upward.  So if you are a trader you could benefit from all of the government stimulus money out there and actually make some cash.  The thing is, the government stimulus programs will be in the end, a kind of heroin -addicting the financial markets.  In fact, it already is.  When the economy is deprived of it, it will create a terrible reaction just like an addict going off their drug.

Meanwhile the drug pusher, the Federal Reserve, will have to decide when or whether to take the drug away.  In absence of any good fundamental data like rising employment or incomes, that will be a hard call.  Soon there will be unavoidable evidence of inflation and then the Fed will be between a rock and a hard place.  They have a dual mandate after all, allegedly, to control inflation and reduce unemployment.  Which one will they choosewhen  the two are not mutually compatible?  You can bet the farm that it won't be to control inflation. 

Inflation doesn't vote and people do.  They will try and save jobs with more and more "stimulus" before they try to reign in prices and there is the danger we all face. Gold and Silver is the place to be.  Not stocks, bonds, or real estate.  They are all being artificially supported in a price bubble by too much stimulus.  You don't want to hold them during the “withdrawal phase”.