The financial pages during the past few days have been filled with great news from Wall Street. Last week the Dow Jones Industrial Average reached an all-time high of 14,115.51.

Surely the record activity on Wall Street must reflect good economic news for the entire nation. If the stock market is doing well than folks on Main Street must also be seeing the benefits of a robust economy, right?

I have no doubt that well-paid analysts and hedge fund managers can explain why the stock market has benefited from rising values. But then, these are also the same bright folks who generally thought that Enron and WorldCom were both great companies and pillars of the financial community and failed to anticipate the $5 trillion marketplace plunge that we saw just a few years ago.

A lot of people who don't manage hedge funds must be scratching their heads when they look at the soaring prices on Wall Street. It seems odd that the stock market is doing so well in the face of economic news which is best described as worrisome.

For instance, has anyone noticed that the value of the US dollar and the Canadian dollar are just about the same? For decades the Canadian dollar was worth consistently less than US money but now that the two currencies are roughly parallel what we have is evidence of a US dollar that has fallen in value.

The same is also true of the euro, which for a long time was priced well below the US dollar. Today a single euro is likely to be worth about $1.42 and some places in Europe will not accept U.S. currency.

Anyone remember when oil was priced at $32.21 a barrel, a price which seemed outrageous at the time? That was the price when President Bush took office in 2001 -- last month the price hit $82.86, more than $50 per barrel higher and money which in too many cases supports oppressive governments and delusional fanatics. Meanwhile, we have no effective or meaningful energy independence effort in place but the nation's automakers continue to help by producing most of the world's least efficient automobiles.

The budget deficit for fiscal 2007, a period which ended September 30th, is likely to be around $158 billion according to the Congressional Budget Office. The multiple surpluses left in the last years of the Clinton Administration have been demolished and the national debt limit has just been increased to $9.815 trillion. That sure sounds better than $10 trillion.

As to the our trade balance, it's a joke. This year it looks like our balance-of-payments accounts with other nations will be in the red by about $780 billion -- perhaps $65 billion per month.

I bring these matters up not because I enjoy the dark side of either life or economics but to illustrate the incredible disconnect between the stock market and the substantial realities which we face.

Yes, sure, a weakened U.S. dollar means our goods and services will be more valuable to foreign buyers. Yes, no doubt, our multi-national corporations are earning huge revenues abroad, money that once brought back to the US and expressed in dollars inflates profits and excites Wall Street. And yes, higher currency values abroad means imports will be more expensive and thus we are likely to import less.

Now very real issues with deficits, energy, trade and currency are being dismissed and ignored. This is a mistake and not at all different from what we have seen in real estate: A few years ago everyone laughed when the inevitable consequences of toxic loans were discussed and today we are experiencing the outcome.

As a result of predictable mortgage problems huge numbers of people are being foreclosed and various lenders, stock brokerages and hedge funds are reporting massive losses. This is somehow considered good news by some on Wall Street, as if the worst is over.

Tally ho, on to the next quarter!

If anything the hard times created by toxic loans that impact so many people today will impact more tomorrow. We know this because we know how many loans and what type of loans have been issued in the past and we know too that a large and growing number of these loans will fail. If you think the mortgage marketplace is a mess today you won't want to open a newspaper when the foreclosure numbers for March 2008 come out.

Protect your interests. You can't do much about international trade or federal deficits, but if you have an exploding ARM -- one of what HUD Secretary Alphonso Jackson appropriately calls "suicide mortgages" -- refinance now into a fixed-rate loan to protect yourself should interest levels surge or loans re-set to bankrupting heights.

For more articles by Peter G. Miller, please press here.