Stock Values

Bernanke admitting inflation is significant.

The problem is that there is no place to hide from inflation and nothing Bernanke can do to stop it.

Eventually, he will be forced to face reality and raise interest rates, which will put the final nail in the coffin of the housing market. The price of other necessities will go up and there will be a very general and broad realignment of values.

My guess is that stock market will be the only place where you have some chance to preserve value of your savings, but many companies will not be able to remain competitive and will go out of business. So, short term, there will be a drop in the market across the board while players scramble to figure out “who will live and who will die.” Those who remain, will appreciate substantially.

However, admitting inflation is only the first step and, like I said before, my crystal ball is in a repair shop, so I have no idea when this will start or how long it will take. The above is only the most likely scenario.