I'm no financial savant either, and I am definitely NOT a gold bug, but...
Two weeks ago, I transferred my retirement plan from large-cap stocks to guaranteed interest portfolio. Here's why:
1. Both Vietnam and Iraq are wars with no clearly defined aims -- nobody can define "winning" -- compare to WWII (unconditional surrender by the Axis) and even Korea (stalemate at the 38th parallel is good enough for us).
Yes, I am wearing my asbestos suit for this comment!!
2. Like in the 1970's, our productive capacity continues to be transferred offshore; then to Japan, now to China and elsewhere. This does not bode well for the average high-school educated working man.
Thank heaven for that asbestos suit!!
3. The government cannot quit giving away money to anybody with a sob story. The only way to make this work while fighting a war is by inflating the hell out of the economy. As was learned in the 1970's and 1980's, if you do too much inflating, the bond market will impose its unique brand of discipline and interest rates will go up, up, up until the inflationary problem goes back into its cave. This will negatively impact housing starts.
4. In 1976 this country elected the most incompetent so-and-so ever to walk the earth as President. To say the least, and borne out by subsequent events, ol' jimmuh did not have the best interests of the U.S.A. on his priority list. What if we get rewarded with Shrillery in 2008? If so, who is the counterpart to Reagan who can come on the scene and fix the screw-ups?
Please note that I haven't used the word "crash" because the American economy has proved to be very resilient; however, I see some problems ahead.
Oh Lordy, I forgot energy prices! That will continue to put the squeeze on the poor, long-suffering American consumer this winter, too!