We are full of question marks this morning.

What do stock market investors see to celebrate in $60 oil? The last time the Dow was at this level - January 2000 - you could buy a barrel of Arab light oil for just $24. And there was no War on Terror...no war in Iraq...no war in Afghanistan...the trade deficit hit a record in 1999 of $269 billion (now over $800 billion)...the U.S. government ran a surplus (albeit fraudulent)...homeowners carried only half the amount of mortgage debt... and Bernie Ebbers was still a free man.

But investors are still buying...and have pushed the Dow up above its level of six years ago...

What gives? What is it they expect? Higher earnings? Higher prices? The second coming?

There are only two reasons to buy a stock. Investors buy stocks for the dividends...for their share of the earnings. Speculators buy stocks because they think the stock price will go up. Currently, dividends yield an investor about about half the rate of inflation. So, stock buyers must be gambling that prices will go up.

Actually, even in general market declines; stock buyers often think they will be the exceptions. Bloomberg recently did a study of the performance of brokerage houses and research analysts. Looking at 350 of the top firms
- companies with the brightest employees, with the plummiest salaries, the nattiest suits, the slickest educations - they found something extraordinary. Even the very best of them only got it right 34% of the time. Merrill Lynch was number one. And Merrill Lynch picked 200 stocks, of which only 68 turned out to be winners. These are full-time professional analysts, earning an average of about $600,000 per year. And behind Merrill Lynch were 349 firms with even worse performance.

If the pros do so badly picking stocks...imagine how the average investor is likely to do.

What makes them think they will beat the odds?

Here we draw a blank. We stare at our computer screen and wonder. Maybe a new flood of liquidity will float stocks...maybe that is what is keeping stocks high now. Flush with cash, speculators look for a place to put it. With housing slipping...commodities slouching...and emerging markets shaking, what's left?

And, nowadays, at The Daily Reckoning, we can no longer even take pride that our skepticism is contrarian. It is practically the consensus among experts.

Even Ben Bernanke finally went to Congress on Wednesday and conceded two
things:

First, housing really is going into a substantial slump, he admitted.

Second, baby boomers are going to bust the U.S. budget.

About the first point, we have written enough for this week. Dear readers know the score. Property prices are going down nationwide. In some places, they are falling sharply...some properties are even going 'no bid.'

If the trend continues, it is bound to do severe damage to the U.S. economy...since so many people, in so many places and so many ways count on rising housing prices. Many owe their jobs to it. Many more owe their spending money to it. Without rising housing prices, spending must decline. And falling spending, in a consumer economy, has to cause an economic slump. In the year 2000, for example, homeowners took out exactly zero equity from their houses. By 2006 the amount had risen to nearly $300 billion. Without that money, the U.S. economy will be in trouble.

Yet, in the face of this simple logic, stock buyers keep buying. What is it that they could possibly expect?

Bernanke's second point provides a more fundamental, structural reason why stocks are probably no longer a good buy. People have come to expect certain things...and have built their financial lives around these expectations...but they are probably soon going to find out they are as faulty as a California coastline.

Why? Because, in order for the typical baby boomer to receive the Medicare and Social Security wampum they have come to expect, the share of U.S. GDP taken up by the Federal government would have to increase from 18% to 24% by 2030. The two monster spending programs themselves would have to nearly double in size from 7% of GDP to 13%.

What this means is that spending currently going into other things will have to be redirected to the mammoth programs. Which means that, most likely, as the years pass, boomers will realize that they cannot depend either on their house prices or on the feds for their retirement financing. Instead, they will tighten up their own budgets and start laying in some reserves of their own. Almost certainly that will deliver a body blow to the U.S. consumer economy...

And that will be the coup-de-grace to the stock market.

No, dear reader, this is not a time to buy stocks... it is precisely the time to sell them.

*** India is booming.

We've been turning an eye to India for some time now. And, in December, we'll take our first trip to the subcontinent to have a look for ourselves. But the news we're hearing is breathtaking.

The Indian stock market has tripled its capitalization in the last three years. Now, there are 100 companies valued at more than $1 billion...and 10 to 12 at more than $10 billion.

One of the major, if not THE major, trends of our time is the shift of power and wealth from West to East. In the last ten years, real wages in India and China have soared. From the press reports, at least, people are earning more and more money...factories are booming...the economy is pulsating with growth and innovation. We have no way of knowing where this will go...but it seems reasonable to expect it to continue.

Looking at the long sweep of history, Indians were generally about as rich as westerners. According to Paul Bairoch, the difference in income between Europe and India (or China) was only 1.5/2:1 in the eighteenth century. And the country produced a massive financial surplus. The annual revenues of the Mogul emperor Aurangzeb (1659-1701) were around $450,000,000 - more than ten times those of his contemporary in France, Louis XIV. Some say the Mogul court had a treasure equivalent to one and a half billion dollars. India was the leading manufacturing country in the early eighteenth century, with 22.6% of the world's GDP and 25% of the global trade in textiles. And why shouldn't it have been so? And why shouldn't it be again?

It is not as if only we in the west have had the internal combustion engine...or coal...or now, the Internet. Of course, politics and culture play big roles in economic growth, but their influence is not fixed...it evolves. Once, the culture and politics of the West fostered high rates of economic growth. Now, the politics and cultures of the East seem to be the ones allowing growth. Even still-communist China appears more receptive to capitalist investment, innovation, and growth than Europe or America. So productive and profitable is China, Inc., that she has become America's biggest lender. Without her, U.S. standards of living would decline quickly.

Want to get rich in stocks? Sell Western stocks on rallies (such as now)...buy Asian stocks on dips.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.