But bond watchers, those quivering investors who hinge their lives in fervent anticipation of the slightest bit of good news, may just have found the term they were looking for and in the oddest place. Finally, fixed income investors can grasp hold of a defensive position and know that they have done the right thing.

The F.O.M.C.'s belief that the economy is growing comes with an unstated caveat. They have yet to believe that the unprecedented stimulus that was given to the economy in a wholly artificial manner will be enough to sustain the economy in the coming eighteen months. Deficits can only increase to a certain point before someone needs to ante up and that date in 2005 in quickly approaching. If it is the current administration, look for a sudden drop in long Treasury prices just as the election takes place or immediately afterwards. If we are fortunate enough to replace the current president, the drop will still occur but it will not last as long.

The nagging and lingering question is whether the rising economic growth will impact the world or the U.S. more during that period. In the case of our economy, which is riding the same false sense of hope that Wall Street seems to enjoying, the basics still apply. Prices go up as the demand increases. The supplies for replacements however will lag behind. This is in large part due to lower levels than an optimistic industry captain might have retained them - had he or she been optimistic. So slow are these replenishing companies reacting that it could be a warning sign that the current belief that the worst is over may be more of a hiccup instead of true recovery. Finding replacement parts may take some time but it is cheaper than ramping up expectation when there is no real belief that recovery is here to stay.

Even spot commodity supplies that have dropped lower signal more ennui than hooray! Every industry knows that the workforce is still there willing and waiting and the drop in claims is not necessarily running in tandem with job creation. It is sustainable demand that even the best analyst is unwilling to predict. When people shout from the television that "long term is dead; short term is making money", bond investors have to just be delighted.

And since I mentioned commodities, it is probably good to say a few words about everyone's favorite: gold.

Many questions of late have been asked of me about the best way to own gold. In the past, I may have said that a good gold fund would do everything the investor wanted. A fund manager would be in a better position to spread the risk among many different mining companies, many of whom are reducing or have eliminated their hedging practices in favor of fair play. Hedging basically involves holding a portion of the company's reserves in the event that prices began to fluctuate too wildly.

With gold above $400 an ounce and with sentiment growing steadily that it will stay there, investors have come to believe that they have missed the boat. But gold may be a better purchase as is rather than as a stock or in a fund. The old axiom comes to mind, "buy high, sell higher" as some popular opinions suggest that $500 is not out of the question.

It is important to understand some basics about gold and what the true value of it is first before you get too involved with the shiny metal. First, there is only so much gold in the world. Current speculation about how much is in circulation puts the number at 5 billion ounces. Of that the Central Banks own 20% and the Fed controls it.

Owning gold is bearish and always has been. Investors see gold as a safe haven when the dollar or the US equities markets look skittish. Gold acts a comforter during political or financial unrest.

Take the long look at the state of the world financial today and it would be too far of a reach, based on the criteria above to see the glass as half empty. If that is the case, gold would be the perfect hole in the ground to hide in. But the companies that produce it may not be capable of producing equally investable earnings and that makes gold funds less attractive as the price of gold rises. Should gold prices fall, funds that invest in the metal would fair better than individual ownership of gold related equities, but not by much.

Order your copy of Building Wealth in a Paycheck-to-Paycheck World by Paul Petillo. It is packed with safe, proven wealth-building strategies that cover all the major components of a balanced financial plan, including:

• Straight talk on mutual funds, bonds, real estate, and annuities
• Techniques for avoiding financial disasters
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• Road maps to buying a home and saving for college and retirement