First things first you need to understand that cash is not king and should not be used to value assets.
The best way to value assets is to use a universal store of wealth and real money such as silver and gold.

One of the best ways to start your analysis is to check out the DOW/GOLD Ratio which will give you the value of your purchasing power against real money, in this case Gold.

When it comes to real estate or the cost of a single priced medium family home measured you should be pricing them and measuring the value of them against Ounces of Gold and Silver, not Fiat Currency like the USD, Euro, CAD, NZ, AUS or any other paper currency.

If your house goes up in price against a fiat currency, but the amount of fiat money you get for the sale purchases less food, gas, petrol, water, power or shares in stocks or ounces of Gold or Silver, it means that your house has actually fallen in value even though the price for the house has gone up.

The exact same thing can be said when you are valuing stocks on the share market against the Dow/Gold Ratio.

Basically when you price and value the Dow in Gold what you will see is that it has a mean of about 4 Ounces of Gold.

If you are to start back as far as 1900 and continue up until 1929 when the share market got out of whack and moved into a bubble, you would see that the value shifted from the mean of 4 ounces of Gold up to to 18 ounces of Gold. However this was based on the fact that the prices of the stocks themselves were moving and not the actual cost for Gold, which was priced somewhere round $20.67 an ounce.

Then the markets crashed and they reverted past the mean down to just 2 ounces of Gold in 1932. Then the markets had a bull run up until 1966 to about 28 ounces of Gold and at this time the stock markets moved sideways but Gold began to move as it began free trading in 1971, at which time the market reverted and the Dow/Gold ration went all the way down to just 1 ounce of Gold, meaning that on that day the cost for the DOW and 1 Ounce of Gold was exactly the same price.

Then we had another bull market where the Dow/Gold ratio went from the 1 ounce of Gold all the way up to 45 Ounces of Gold in the year 2000 and at this time it is another reversal where it has come all the way back down to 8 Ounces of Gold.

Now considering that the mean over all this time from 1900 is 4 ounces of Gold and the fact that when it rose to 18 ounces in 1929 it reverted back to 2 ounces and when it hit 28 ounces in 1966 it reverted back to 1 ounce before blowing out to 45 ounces in 2000, we expect that this time around the Dow/Gold mean could fall to as low as ½ an ounce.

In saying all this it is possible in a deflation that it may only go down as low as 2 ounces of Gold but in an inflationary period or even a Hyperinflation which it looks like is actually on the cards it could go down to as low as 1/10th of an ounce of Gold.

If you are not a holder of Physical Gold then you can make the same adjustments and base them on Physical Silver, which at this point in time is still the cheaper option as far as purchasing goes and when all is said and done it has more to gain that Gold does.