In 2008 few Americans were privy to the discussions that determined whether the world financial system would completely implode or be saved. Wall Street was crashing while policymakers argued about what was to be done in the little time before the unthinkable could happen.

However, we all know now that the system is potentially being "saved" by the ongoing economic bailout: including Ben Bernanke's QE1 and now QE2. We are now faced with a new economic reality raising the following five questions regarding the potential growth of one's money and one's financial survival in an economy with potentially high rates of inflation in 2011 and beyond:

Consider that one may think of certain equities investors, who may possess the ability gained through education and/or long experience, to anticipate the probable long term future direction of the stock prices of individual companies or the stock market in general, as investors with both vision and conviction.

Wednesday, October 6, 2010's Wall Street Journal's front page headline read: "Central Banks Open Spigot.... Japan launches Bond Buying, Fed Officials Urge More Easing."

If the Federal Reserve led by Ben Bernanke adopts this much anticipated policy of a second round of quantitative easing , then U.S. economic deflation for the foreseeable future may be off the table. A cautiously rising stock market may be reflecting the belief that "the huge bond-buying effort they (the Fed) ended in March (2010) is likely to be resumed." We know that the U.S. Dow Jones Industrial Average peaked shortly after that bond buying ended and fell rather dramatically.

The immediate force starting in May 2010 with which our investments may have to reckon may be deflation (lower or stagnant prices) throughout our economy and in asset classes such as the stock market, oil, silver and potentially gold.

The Dow Jones Industrial Average closed at 10136.6 on Friday, May 28, 2010. Gold closed at $1,212.20 per troy ounce and silver closed at $18.43 per ounce on this date. (Editor's note: oil traded at $74.09 when this post was written).

The stock market may continue to rise - but realizing partial profits at the present time and in the manner described below may be a way to protect your portfolio from a correction and enrich your emergency kitty. In this article, I describe price ranges on the Dow Jones futures continuation chart which may be levels to consider for such investment actions. The Dow Jones closed at 10,038 on the continuation chart on October 22, 2009.

The stock market continues to rise to a disbelieving chorus of many hedge fund managers who are simply along for the ride and a mostly noncommittal investing public. Readers of my blog may know that I am invested in equities, various mutual funds and ETFs, and gold and silver.

The Dow Jones futures contract on the continuation chart closed at 9733 on September 18, 2009. A 25-30% correction in the Dow would not be unwarranted, though it may occur from a higher price level. However, there is weekly chart support at the 8640 area on this contract and a daily support band between 8290-8415, either of which may act as a barrier to further decline should a correction ensue. I expect these support ranges should hold. Note: this website will soon present charts on a regular basis.

Both top performing former Mutual Series Funds manager Michael Price and Dreman Value Management's David Dreman concur that rising stock prices in the coming years may present opportunity for stock market profits - if you are invested in the right stocks and if you understand the economic nature of the "recovery."

Bloomberg.com reported on September 9, 2009 that Price, who sold his Mutual Series Funds to Franklin Resources in 1996, is finding value in selected equities in today's market. He sees similarities between the 1974-1982 100% stock market rise, and today's 50% ascent from the March 2009 bottom of 6469. The 1974 market trough to which Price alluded was a once in a generation buying opportunity, when the Dow ascended from a low of 577.60.

President Obama announced on August 25, 2009 that Federal Reserve Chairman Ben Bernanke would be reappointed to another four year term. Bernanke's appointment, which will likely be confirmed by the Senate, may impact the course of American economic development for many years to come.

Many observers have speculated on what form the Chairman's exit strategy from his policy of monetary ease will take - a policy that saved a select group of failing companies (and their employees' jobs) and potentially prevented a deeper collapse of the stock market and financial system.

BNY Mellon and Dreyfus Chief Economist, Richard Hoey, elaborated on the potential for a continuing bull market in stocks (though not without corrections) in an August 7, 2009 interview on CNBC. The Dow Jones industrial Average closed at 9370.07 on that date.

Hoey stated "we are at a particular cyclical moment." Further, he said that the global recession is over and that the leading economic indicators for every major country in the world are rising. "We are going to have rising real GNP for practically every significant country in the world in the third quarter," Hoey stated.

Economist Richard Hoey of BNY Mellon & Dreyfus is a veteran forecaster with many prescient calls to his credit. In an interview on July 27th on CNBC, Hoey stated that "the evidence is now clear cut" that the Fed has done enough to stabilize the financial system. He further stated that a "classic recession bottom" is in place and he expects 3 to 3 ½% economic growth in 2010.

Hoey states that "massive inventory liquidation" took place during the 2nd quarter and that auto and housing weakness was so profound that there will be no more exhaustion. He notes that Chrysler has shut down all its plants in America (a sign of the times...) and that you cannot exhaust something further that is not there. Hoey sees the roughly 20% of consumers who still have assets left carrying the weight for his projected economic turnaround.

Readers of my blog may know that I anticipate rising price levels and higher interest rates in 2010 and beyond. Bear in mind that it takes time, sometimes years, for a strong inflation to embed itself in the economy. I want to talk about ways to protect your portfolio from rising prices and interest rates, but first a bit of history:

While President Nixon was in office, Fed Chairman Arthur Burns responded to pressure from the White House eager to have a strong economy when Presidential ballots were cast in 1972. Burns expanded the money supply to help ensure a growing economy in time for Nixon's reelection. Inflation soared to 12% by 1974. The oil shock in 1973 compounded the economic and inflation situation. The stock market lost almost half its value, and inflation hedge investments such as gold and silver plummeted from their highs when the economy dove into a deep recession in 1973-74. In this case, political expediency led to easy monetary policies and extremely high inflation.

See specific gold and silver strategies

Could it be possible to think in our current economic times that America may lose complete control over its own economic future? Has an economic and financial process begun that may not easily be undone that could threaten the very core of what is left of our economic, financial and social well-being?

I believe one big problem lies with the pyramiding of debt over decades by our elected officials: the rapid expansion of the United States public debt and our country's expanding yearly budget deficits. The national debt is now $11 trillion. Wikipedia states that under the 2010 Obama budget projections, the debt is projected to reach $20 trillion by 2015, but is expected to increase to nearly 100% of GDP by 2010 and remain at that level. Vice President Joe Biden has now admitted to miscalculating the "strength" of the potential recovery. All bets are off. And that is what I believe the Obama stimulus plan(s) are doing: adding to our debt and betting our future on failing companies and industries.

A long term bull or bear market in equities may last as long as 16 years, as was the case in the bear market from 1966-1982. That long term bear market included a deep 48% retrenchment in the Dow Average in 1973-1974. The market rose powerfully out of that 1974 bear market bottom, and stocks then traded in a range until the new dawn of the long term bull market beginning in August 1982 as a free market Reagan administration took over the reins of power.

The gold price has recently broken out of a flag formation on the upside on the weekly gold chart in a price move from $900 and trading as high as $1007.70 on February 20, 2009. The gold market is now pulling back down sharply to as low as $905.70 intraday on March 3, 2009. This pullback to the breakout point appears to be normal, and the gold market could resume its powerful uptrend once this retreat is over.

Many people who place their money in the stock market are really traders rather than investors. In fact, I do not think that there are too many long term investors left after what has happened to the market in since September 2008, when the Dow Jones has fallen 6,000 points to 7,500. Long term investing has been somewhat discredited and both a well known financial commentator and an often interviewed hedge fund manager have declared end of such an investing style. See my article to the contrary: Why Long Term Investing in the Stock Market is not Dead.