Sorry I wasn't clear. Yes, stocks should go down or sideways, and not have any sustainable rallies, until the end of the Fed rate-tightening cycle. And I am guessing (with little certainty in my guess, this is just a scenario), that the next Fed rate-tightening cycle begins in late 2002/early 2003, about a year from now.
The reason I'm thinking about TIPS and gold (which I have never considered before), is that they look like good places to hide, during that rate-tightening cycle. Tentatively, the third Fed rate hike would be the time to shift out of stocks, into gold and TIPS. And waiting for a 10/1998 or 9/2001-magnitude panic selling in the stock market, to re-allocate into stocks.
My timetable, however, is very tentative, because of the magnitude of overcapacity throughout the world. Countries and companies are so overleveraged, they will be desperate to sell their goods, even at below cost, to make their debt payments. The lack of pricing power may persist, keeping inflation down, longer than I'm anticipating. |
