Zeev,
I'm at a total loss as to what's coming down the road also. What happens when inflation meets with the Feds printing press? As you stated " the Feds supplied so much liquidity, it is busting to find a home, and any spark of hope is used to ignite the liquidity fires." At the same time, however, energy prices are ramping up, affecting every aspect of the economy, including food, housing, manufacturing and transportation.
As much as the Feds say that inflation is "minor", (discounting food, energy......blah, blah, blah), anybody who is breathing and conscious recognizes that there is plenty of inflation in staple products. I can't remember anytime in the past when a large California orange cost 60 cents EACH here in the Midwest. I also don't remember gas at 1.85 a gallon, and natural gas increases of 300% in one year (and we need a LOT of natural gas to keep warm here). The extra money we're spending on food, heat and transportation isn't going to be there for discretionary purchases as it might have in the past.
Add to that the loss of 6 trillion dollars in wealth effect in the market, the loss of >1.5 million high paying jobs so far this year, declining manufacturing and sales in virtually every market sector, and one has to really wonder what the outlook is for the next 2 - 3 years. Granted, the energy situation will be solved, but not in a hurry. Meanwhile, the piper will be paid, and the economy will be drained of discretionary bucks that might have been spent on a trip, a new car, or a faster computer, cell phone, and or one of the other gadgets that drove the big binge in electronic devices and infrastructure. I don't like to paint a glum picture, but reality is not the hype coming from the Feds Or the market.......reality is higher prices for everything for the next 2-3 years, and for those that still have a job, probably less money to pay for it. Meanwhile, I'm cashing in on this latest pump job, but my finger is on the trigger, and the trigger is adjusted REAL light.
Regards,
Knip
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