I have been following this board for a short while and i am impressed with thelevel of discussion. Here are some of my thoughts: The biggest issue facing the markets is the fact that we are approaching the peak production of oil. When this tops then the cheap energy that our economy relies upon will be gone. From what I have read is that peak oil will happen anytime form now until 2011. After this point then all oil that ever existed on earth will be used and each year after this the amount of available oil will decrease by 2-3% /year. This will cut the legs out of the market IMO. So this brings me to buy gold as an alternative to stocks. The previous "oil crisis" were caused by political situations- 1973 Israeli War, -1980 Iran revolution. this year was the first time that the price of oil was driven upward by demand- ie Asia wanting a bigger piece of the pie. Global population is continuing to grow and so demand will continue to increase.
High energy coupled with a runaway U.S. Government deficit 9weak dollar) is driving the price of gold upward.
I am not smart enough to predict the next five years but I am starting a position on precious metals in case of a market sell off.
You"re right on with your thinking as to where we are and where we're going. A great book released this past spring written by a guy whose been running money for the past 25years is called "THE OIL FACTOR". Stephen Leeb, the author, writes an easy to read understanding of what you speak of. You can get a free peek on Google; Type in the title and there's a free chapter to read. Do it! It'll make you money!!!
As is a book by the same name written by a prof at Princeton named Deffeyes
Back to deficits- it should be interesting how Bush will cut the deficit in half and enact further tax cuts. I do not think he has the will or the desire to stop the pork. He had no vetoes in his first term and with a stacked deck it seems unlikely to me that he will change his ways