Hype Mongering and general market malaise

I am becoming very worried about the accelerating pace of hype mongering that is being spread through the internet. People are buying companies like Apple, Netflix, and Groupon without understanding the investment thesis, just because it is popular (some pan out, some don’t). I am trying to find a method of hype arbitrage, but so far the market forces behind the hype are just too strong. Trends last much longer than they should and go in illogical directions. Somebody is pulling the strings, but I am having trouble finding a way to define it, let alone profit from it. It’s a psychological chess game that I am ill equipped to play.

I have been reading a lot of interesting things that seem to strike a chord. Especially the argument that all the gains of the past decade (even to some extent corporate profits) have been related with the expansion of credit and money supply and declining interest rates. Ultimately there is no place for money to go except back into banks, and shrinking valuations in the stock market and housing market will hit financial companies the hardest (in addition to all the public invested mainly in financial stocks).

With the inevitable rising of interest rates leading to a contraction in money supply are we not virtually guaranteed the market will as a whole go down significantly? Where is the catalyst to keep things going? Are corporate profits (fundamentals) going to catch up to the inflated stock market prices? Right now, I am waiting for the stock market to recover, but are we going to resume these ridiculously low interest rates at some point in the future to bring things back to normal? No, normal is a long way away from where we are now, and I don't see how we are going to sustainably break past 14000 in the TSX index in the next 10 years. Its a choice between inflation and rising interest rates. Either way has the same effect. Things will cost more.

Rising interest rates will eventually draw idle cash away from Gold so that too will probably crash. If we go the route of inflation however and keep interest rates low, gold prices will continue to rise. But what happens then? I don't want to be so negative, but please tell me the argument against all this?

I am seriously considering moving to cash for the majority of my investments, and only investing in stocks that have reasonable valuation and pay dividends in industries where there is still some possibility of growth. But the next decade looks pretty ugly from here. Have we seen the bottom yet?