Since March 2000, the stock market has seen some volatile movements. In 2001 we had the September 11th atrocities, which sent the markets plummeting. Then there were the scandals: Enron, Tyco, Bear Stearns, and Martha Stewart. More recently we have WorldCom, and a number of other large U.S. companies revealing questionable accounting practices. During this turmoil a great many American citizen/investors took their money and headed to the sidelines. They sold out the balance of their stock holdings, or what was left of their life’s savings and put that remaining cash into something “safe”. The one thing most of these safe vehicles shared as a common theme, is that they were all dollar denominated., mostly certificates of deposit, bonds or money market accounts. Last year stock funds accounted for only 60% of 401(k) retirement contributions. In the year 2000 the allocation to stock funds was almost 80%. Investors are buying “safe” dollar investments. The decline in the price of gold from 1996 to 2001 was due to the strength of the US dollar on the foreign exchange markets. The increase in the gold price since 2002 is conversely due to weakness in the dollar. The price of gold in euros has not increased since June 2002. What we are really witnessing is a bear market in the dollar. It will continue. Whether or not the rest of the world joins us in an inflationary binge remains to be seen. If they do the resulting inflation will further pressure the battered dollar. holding this asset class is a risky proposition. One thing, how ever is certain, dollar fixed assets are doomed.