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Politics : President Barack Obama
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To: Road Walker who wrote (146705)11/5/2014 7:40:27 AM
From: RetiredNow  Read Replies (3) of 149317
 
Agree with you on deflation here in the US. That is virtually guaranteed with our ending QE and Japan starting up their end stage to oblivion QE. Key deflation will be in the stock and bond markets, though. Deflation elsewhere is actually good for the consumer, even though we like to pretend it is not. I personally love lower gas and food prices, if I can get them.

Maybe a fool's errand to predict the markets, but since the Fed is the only game in town and fundamentals don't matter anymore due to excessive Fed interference in the markets, the only way to guess the direction of our stock market is to guess what the Feds going to do.

Here's my guess again. I've been saying that this relief rally won't last. Why? Because I was pretty sure Congress was going to be swept by the GOP, since the polls were pretty clear on Americans' disgust with the Dems handling of the economy. That has now become fact. My next prediction is that the GOP will put a lot more scrutiny on the Fed. I think they may pass an Audit the Fed bill or something. Even if they pass nothing because of Obama's veto, they will scare the Fed into thinking their independence is at risk, which will put a chilling effect on their Keynesian dreams.

Prediction: the Greenspan/Bernanke/Yellen put on the stock market is over for the next couple years at least. Stocks will come down again and correct, maybe as much as 20% from these levels.

Of course, as you said, predicting short term fluctuations in the stock market is a fool's errand. But it's fun to do anyway.
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