The US Stock Market Is Ripe For A Correction
$SPY, $DIA, $QQQ
The US stock market is headed for a major decline, read correction, as the US Fed begins to curtail its massive easing program, and raise its record low fed funds rates, currently at Zero to 0.25%.
The Big Q: What happens when the Fed stops buying?
The Big A: The financial markets correct on the lack of liquidity.
The S&P 500 benchmark stock index stood at 2,101.49 at the close Friday, about 1% below its record high.
“This is the 1st time in recorded history that all the major world’s central banks are printing huge amounts of money,” Jim Rogers said last week.
“Now the world has this huge artificial ocean of liquidity. The people getting the money are having a wonderful time. But when it ends, it will be very nasty. The idea that the solution to too much debt is more debt is mind-boggling.”
The economy has been in recovery mode since June 2009, and the S&P 500 has 3X’d since 9 March 2009. But, “we have had economic slowdowns every 4 to 7 years since the beginning of the Republic,” Mr. Rogers said.
“We are overdue for another problem. When this artificial sea of liquidity ends, we are going to pay a terrible price.”
Have a terrific week.
HeffX-LTN
Paul Ebeling
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