Remember the 'Bear's behavior

China is now encouraging the idea of replacing the dollar.  As we lower the value of the dollar through our continued increasing debt, their investment in us reduces in value.  I don't blame them for their concern, but it is a signpost of what is to come if we continue on the path of spending that we are on.  A few years ago, Paul Volker said, "A nation's exchange rate is the single most important price in the economy." Our current actions are going in the opposite direction.  Keep an ear out to hear what other countries are saying about our financial direction.  The Czech prime minister, who's government just failed, and is the EU president has strong words against our behavior.  He's encourage the others in the G20 not to follow our actions.

Today, positive news with durable goods and new home sales.  In my opinion, this is one of those 'bear' upticks.  Home prices are still falling and we have reached a point with mortgage rates under 5% and with the reduced prices of foreclosed homes, buyers are increasing.  New home values also fall to compete with the foreclosed group.

About 2 weeks ago, I wrote to my two senators, the local representative, Republican Senator Spector from Alabama, and Lou Dobbs at CNN regarding my concern about China.  The only response I have received is an automated one from Spector.

For those of us who have lived through 'bear' markets, we need to remind ourselves of its erratic behavior.  For those who haven't and are invested in the market, I encourage you to look at history.