Some positive signs are blowin' in the wind. Maybe they're enough to underpin a real recovery. Maybe not. But they are definitely positive, and together, may be the foundation of a stock rally with some strength. Here are some of them.

Dividends: General Electric (GE), Weyerhaeuser (WY) and many other companies are raising theirs. GE's quarterly dividend went from 10 cents a share early this year to 12 cents to 14 cents. If you own it by December 27, you'll get it on January 25. GE is almost a surrogate for the economy as a whole since it has so many divisions, offering many products and services. When GE raises its dividend it means the board and management see better times ahead. Companies hate to raise or initiate dividends only to rescind them a few months or even a year later. They know some investors buy the stock for income, and if that shrinks, those investors sell, push the price down and move to another stock. Watch for more companies to raise their payouts (especially banks). It's a sure sign they see better earnings ahead.

Corporate America is hoarding cash and none more than Apple Inc. (AAPL). The ever increasing pile of cash at Apple increases the temptation to do something, but what?

Steve Jobs is reticent to start paying a dividend primarily for symbolic reasons. To give Apple's cash stash some perspective, the cash in of itself, without the actual company would represent the 45th largest company in the United States, right behind, Boeing Co. (BA) at $50.27 billion and ahead of Home Depot (HD) at $48.19 billion. It is even conceivable that the cash exceeds Boeing's capitalization, since six weeks have passed since the quarter ended.

The Apple (AAPL) iPhone and iPad are all the rage and the demand exceeds the supply. The supply produced in China is where we are sending a lot of our money -- stimulus money.

Ongoing discussions about whether the federal government should, or should not start priming the economic pump again with a another $750 billion got me thinking: what happened to the first stimulus money?

The money did not evaporate. It did not go up in smoke, and contrary to popular belief, Congress did not eat it, try as they might. If it still exists then why would the economy need more -- and the debt burden that goes with it?

Thursday's positive economic data point concerns the sound that just about every American likes: the sound of cold, hard cash increasing.

A majority of companies in the S&P 500 increased cash to a combined $1.19 trillion, while reducing spending at the same time, Bloomberg News reported Thursday. That compares with about $688 billion in cash on hand at the same time a year ago.

However, investment and hiring remain low, mainly due to excessive industrial capacity, and high worker productivity in the U.S. economy.

Why are Americans hoarding $3.5 trillion in cash? An interesting question. Let's dig deeper and see if we can find out why.

Here are some interesting facts about the $3.5 trillion:

• After reducing money market accounts by 11% this year, investors hold cash equal to 73% of S&P 500 Index. At its peak in 2007, the buying power was at 62%.
• Estimates are for GDP to increase sixfold to 2.9% in the third quarter.
• In 2007 and 2008, investors placed $1.45 trillion in money market accounts. As of the week ending January 14, that number reached a record $3.92 trillion.
• Investors have added $15.8 billion to domestic equity funds since March.

At the end of the regular trading session Tuesday, Cisco Systems (NYSE: CSCO) had a capitalization of $97.36 billion at a stock price of $16.68. The latest company report of February 4, 2009 stated that total cash, cash equivalents and Investments was $29.5 billion.

What can you say but WOW! -- CSCO has 31% cash!

There are other cash rich companies that are holding up well through the economic firestorm but I do not know of any others with this much cash. As consumers and large companies have been trimming their spending, Cisco has had difficulty growing, but I think this is a buying opportunity.

My friends and colleagues have been getting an earful from me lately about establishing economic fire breaks deep into 2011. I gave one of my investment partners a large Post-it simply stating "Fire Break 2011," which is on the wall right between his phone and computer.

We have had stories about General Electric (NYSE: GE) almost daily on our site, most of them are positive about the stock being a value, mine among them. The problem is that if GE was a value two months ago, and two weeks ago, and two days ago -- is it more of a value now that it is priced lower still? More on that later...

Bad times can bring out the best and the worst of us. There is a character with a huge heart and apparently stacks of cash for needy folks willing to wait in line for it in Time Square.

He has been cast as "Bailout Bill" and he has created a stir because he is giving away money directly to those in need, figuring that the folks on the bottom rung of the ladder need just as much help as those at the top, that the government has been bailing out.

According to reports, In order to get the money people have to go to the 'Bailout Booth' in the heart of Manhattan's Times Square; to a small cubicle, where, depending on your story you can get a cash stipend to help out with a present financial dilemma.

How much has investor sentiment and the global economic outlook shifted in the past six months?

Consider this: stocks have fallen so much during this year-old recession that 2,267 companies around the globe in the MSCI World Index have cash positions above the value of their stock and debt.

Further, that's a level of 'offering investors profits for free' that's eight times higher than the last bear market. Global companies in this category include Bank of New York Mellon (NYSE: BK), Italy's Danieli SpA, and South Korea's Namyang Dairy Products.

The U.S. and global economic slowdowns stemming from both a cyclical trough in the U.S. and the global financial crisis have wiped out more than $34 trillion in stock market value, globally. However, the mark-downs do not, in and of themselves, represent a 'buy' signal for investors, so says economist David H. Wang.

"The values are indicative of a significantly deepening recession and pervasive fear. There's fear of counterparties, fear of a lack of return on investment, fear that a home mortgage of business loan won't be repaid," Wang said. "This fear is perhaps the biggest drag on commercial activity today and until it recedes, corporate revenue and earnings will be constrained, which will make it a difficult environment for stocks."

Investors are scared. The value of their portfolios has plummeted. Now many are seeking safety instead of returns.

If you are one of those investors, you need to understand the different levels of security in the options available to protect you.

But first, ask whether capital preservation is really the right goal for you.

If you anticipate needing 20% or more of your assets within a five year period, you should not have any exposure to the stock market. You need the confidence of knowing your money will be there when you need it. You cannot afford the kind of market volatility we are experiencing that could cause you to sell at a loss to pay living expenses.

You have a number of choices outside the stock market. As with all investments, you are rewarded for taking risk. Remember: The most secure choices will pay the lowest interest.

The liquidity crunch is having unprecedented ramifications in markets that were traditionally regarded as very safe. Many financial experts now regard only cash and debt secured by the full faith and credit of the U.S. government as really safe.

"Cash is king," counsels market sector expert Jim Farrish who has chosen "cash" as his latest "sector spotlight". Here is his latest on the need for "patience" from his SectorExchange service.

The sector expert explains, "The market volatility and downside momentum has been king for 2008. Outside of short term trading and/or being short the markets the best place to have been invested is cash.

"My question is why is it so hard for investors to hold cash in their portfolios? Why do so many investment advisors not increase cash positions when market trends shift? Why do professionally managed mutual funds not increase their cash holdings?

"It goes against the psychological grain of investing. It is human nature to believe we may miss out on something. The emotions of investing are in full swing when a prolonged downtrend begins. These emotions dictate how we think and how we act during this period.

"Derivatives - the 'global Vesuvius of debts and bets' that we have been warning about since 2006 is beginning to erupt," says Martin Weiss.

The editor of The Safe Money Report explains, "The time is now to build cash and the best place to put it is in United States Treasury bills or equivalent." Here, he looks at the benefits of Treasuries and the various ways that investors can add them to their portfolios.

"We now have overwhelming evidence of a severe recession. And we have a solid confirmation in the stock market itself. But we also forecast that the Fed would fight back, and do so aggressively, fomenting an
inflationary recession.

"They're pumping in massive amounts of money, trying to calm markets and seeking to avert a recession. But it's too little, too late for the economy. And it's too much, too soon for the already-shaky dollar. *Result: Gold has surged along with other commodities.

"And consumer price inflation, long a side-show on the American scene, is now surging back. Our urgent appeal: If youhaven't done so already based on our earlier issues, the time is now to shift from complacency to protective action ... from bull-market plays to income opportunities ... from risk to safety.

Just last week I reported about the insolvency problems in New Jersey to Walletpop readers, see: The snowball starts in New Jersey. Now, that nasty old snowball has streaked across the country and landed in the California suburb of Vallejo, wreaking havoc on the local government there. CNBC reports that Vallejo Councilwoman Stephanie Gomes states "Our financial situation is getting worse every single day". Ask not for whom the bell tolls, it tolls for the heavy handed labor unions which have coerced sweet pay and benefit packages for the 30% of our workforce which is supported via tax dollars produced by the rest of us who actually make things.

The insolvency of Vallejo should come as no big surprise, and in fact Vallejo is just the leader of what will become a very large pack. Before the end of this year I envision the entire state government of California will be in tears due to a lack of spending cash. You've been warned, it's to become a nationwide trend.

We just can't expect that private sector declines will leave the government sector untouched. The toughest part is that there's nothing government agencies can do about it, except to cut spending or raise taxes. Local governments are in the business of taking constructive dollars from the people who created them and then throwing them into the bottomless pit of entitlements, waste and graft. Now, the chickens have come home to roost, and they're big, mean, ugly chickens at that.

This article is part of a 20 article special report on "Metals, miners and money".

The case for gold and/or other commodities in large part rests on a forecast for higher inflation. With a contrary view, Bob Prechter -- well known as the leading practitioner of Elliott Wave theory -- offers his assessment for deflation. As such, his top investment idea within this scenario is not gold or oil -- but cash.

The editor of The Elliott Wave Theorist explains, "When the bull market in inflation is over, an unprecedented number of IOUs, stacked in an inverted pyramid, will collapse in value in a deflationary rush, and prices from stocks to commodities to goods and services will fall along with them.

"In 1998, we called for a huge bull market in oil that would carry to new all-time highs. That run is now in its final stages. Market psychology fits a major top, because short-term measures of optimism match all-time extremes.

"Investors everywhere have come to the conclusion that the world is running out of oil, despite the fact that the real price of oil (the oil to gold ratio) is lower than it was seven years ago.

"Today, oil is near the end of wave 5. But this is only part of the picture. The rise from 1998 is itself a fifth wave, so the entire advance from 1933 is also ending.

According to the Investment Company Institute, the percentage of cash held by equity mutual funds hit a record 3.7% in March, which is beneath the previous low-water mark of 4.0% seen at the time of the March 2000 stock market peak.

Historically, analysts have viewed the equity fund "liquidity ratio" as one of several long-term indicators that can help gauge investor sentiment.

When portfolio cash is high relative to historic norms, it indicates that investors are overly cautious and that the weight of money on the sidelines will eventually drive share prices higher. Low levels of liquidity, in contrast, suggest that there is not enough firepower to keep the bullish momentum going for very long.