patrick.net

Yawnnnnnnnnn, another BS prediction. How long before you admit that you're wrong and Peter Whiff is a moron?

They are wrong. Stock/home/gold/etc prices never go down.

It is a new paradigm.

We are at a permanently high plateau...

Egads -- Why pick on a 5000 year old medicine? How long have your methods been around?

New Renter says

Well the 2000-03 dip was the dot.com bubble. 2007-10 was housing. 2014 will be ??? what?

Bond bubble

Hard to argue that stock prices are not due for a crash or deep correction. The economy is poor and not "recovering" yet the real estate market is soaring to new highs like its morning in America.

New Renter says

Well the 2000-03 dip was the dot.com bubble. 2007-10 was housing. 2014 will be ??? what?

My guess... the credit bubble bursting.

I think the primary reason stocks are so high is that all the money is looking for a place to escape all the currency debasement and the only place left now is stocks because

- investors have realized that housing ain't coming back to bubble levels
- interest rates are too low for money market accounts, CDs, treasuries, etc.
- gold and other commodities have been through their bubble and are bursting

So it's back to stocks for now. When the big players see some other opportunity, they will move massive amounts of money from the stock market to someplace else and the market will crash.

It's too much money chasing too few goods and services.

New renter is correct.

Also, there are different categories of businesses you can invest in that are not as volatile as the entire index.

Also, there is no need to lose money if you simply wait for the investment to fluctuate back UP if you have the patience/balls/brains.

The profits of companies like Apple are growing, not shrinking. Own Apple and you are paid $1/month/share.

You can smile a smug grin knowing that the Chinese in Shanghai buying an iPhone and iPad is paying you a little chunk of change each month. It works for me.

My little old lady neighbor is richer than God and 95. She got that way buying and holding stocks. She's owned Deere for 60+ years.

Want to see a chart? Check out Vanguard Energy mutual fund, it's invested in oil and gas exploration and production. So, who here thinks people driving cars or heating water or heating houses is going away soon?

That's witchcraft not science.
No different than a degenerate that always bets place on a horse with blue leggings, because it's his lucky color.

Maybe treasury bonds? or the dollar itself?

Dan8267 says

It's too much money chasing too few goods and services.

No, it's wealth disparity keeping money in the hands of rich people. This can be seen because goods and services aren't being chased--only assets.

tatupu70 says

This can be seen because goods and services aren't being chased--only assets.

http://research.stlouisfed.org/fred2/graph/?g=4AP

Dan8267 says

- investors have realized that housing ain't coming back to bubble levels

- interest rates are too low for money market accounts, CDs, treasuries, etc.

I'll point out that housing took off at the same time as the stock market. Investors have been throwing money into both stocks and housing.

smaulgld says

Bond bubble

Gold crashed as stocks and housing took off. If bonds crash it will be because investors are throwing money into other investment options e.g. stocks and housing.

Or porn. Gotta keep the SEC distracted.

tatupu70 says

Dan8267 says

It's too much money chasing too few goods and services.

No, it's wealth disparity keeping money in the hands of rich people. This can be seen because goods and services aren't being chased--only assets.

If that money were to get into the hands of the non-rich wouldn't that likely trigger inflation?

New Renter says

tatupu70 says

Dan8267 says

It's too much money chasing too few goods and services.

No, it's wealth disparity keeping money in the hands of rich people. This can be seen because goods and services aren't being chased--only assets.

If that money were to get into the hands of the non-rich wouldn't that likely trigger inflation?

the inflation is in assets like stocks,fine art and real estate
Prices are rising for luxury real estate and items that the wealthy own. The average person has no massive increase in wages or wealth so consumer goods are not up that much.

More likely what will happen is asset appreciation will continue for a while longer and then asset prices will collapse triggering deflation and a wave of money printing that will reverse into hyperinflation as the dollar drops as a result

smaulgld says

Prices are rising for luxury real estate and items that the wealthy own. The average person has no massive increase in wages or wealth so consumer goods are not up that much.

More likely what will happen is asset appreciation will continue for a while longer and then asset prices will collapse triggering deflation and a wave of money printing that will reverse into hyperinflation as the dollar drops as a result

If you haven't noticed prices have also risen quite a bit across the entire spectrum of residential RE. Something about investors buying properties to rent out which would pay off massively if hyperinflation sends rents skyrocketing.

Of course that assumes renters that have a pot to piss in are willing to pay it as rent.

New Renter says

smaulgld says

Prices are rising for luxury real estate and items that the wealthy own. The average person has no massive increase in wages or wealth so consumer goods are not up that much.

More likely what will happen is asset appreciation will continue for a while longer and then asset prices will collapse triggering deflation and a wave of money printing that will reverse into hyperinflation as the dollar drops as a result

If you haven't noticed prices have also risen quite a bit across the entire spectrum of residential RE. Something about investors buying properties to rent out which would pay off massively if hyperinflation sends rents skyrocketing.

Of course that assumes renters that have a pot to piss in are willing to pay it as rent.

Yes prices of residential real estate have risen because of low inventory (based on 25% underwater homeowners) and investor demand (50% cash buyers) b/c of low interest rates,many as you point out to buy to rent- the question is whether they can rent to the masses and make a profit that is acceptable to them, if not they will dump RE and head back to Wall Street

New Renter says

2014 will be ??? what?

The end of QE.

As much as I hate to agree with Bubbabear, it looks like boom/bust is the new normal. In fact, that chart, if anything, UNDERstates the case, as it isn't quite current:

Looks like the Swiss Alps, LOL.

I don't know if it will be 60%, but it's for sure going to go down. Sucks, because I have no idea where to put my IRA contribution. I sure don't want to go into any index fund right now.

Homeboy says

New Renter says

2014 will be ??? what?

The end of QE.

smaulgld says

The Wall street investors bough tens of thousands of homes many of them still vacant

Many? So that's what, 3-5000 vacant housing units spread out across a nation of 130k housing units.

Homeboy says

New Renter says

2014 will be ??? what?

The end of QE.

QE will never end.

spydah_hh says

Homeboy says

New Renter says

2014 will be ??? what?

The end of QE.

QE will never end.

QE is the new black.

APOCALYPSEFUCK is Comptroller says

How do you spell CANNIBAL ANARCHY!

FACE is back on the menu, ASSHOLES!

Beaver is on the menu too.

Stocks might correct, but I don't think a major drop will occur until interest rates rise. Now, rates are low so investors chase yield. If rates rise, that means the "risk free" rate rises, which means investors don't need to take on risk (i.e. stock market) to earn money. But that hasn't happened yet.
QE and low rates mean an increase in the money supply (easy money). In that environment, investors prefer to hold assets (stocks, real estate) instead of cash. Debt has been in "favor" for decades, in that interest rates have been declining, generally, for decades. Since most people are in debt, the Fed wants to do everything to prevent deflation (which is dangerous because it is a cycle that is difficult to break, and is unfavorable to debtors). Deflation is dangerous because consumers would see advantage in not consuming (everything gets cheaper by the day, so it pays to wait and not buy anything).
When the entire above scenerio (easy money policy to prevent deflation) changes direction, is anyones guess. My guess is sooner, rather than later. Fed sees the increase in asset prices (stocks, real estate) just as we do. They might not make the same mistake of 2008, that being allowing real estate or other asset prices to inflate too high.

spydah_hh says

QE will never end.

This is not a sustainable system.

New Renter says

Homeboy says

New Renter says

2014 will be ??? what?

The end of QE.

smaulgld says

The Wall street investors bough tens of thousands of homes many of them still vacant

Many? So that's what, 3-5000 vacant housing units spread out across a nation of 130k housing units.

Check out american homes for rent last i looked at the sec filing they had bought 20,000 homes and rented 12,000

Homeboy says

it looks like boom/bust is the new normal.

I suspect that it's always been the norm, it's just that the cycle times may be shorter now.

List of recessions in the United States
http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

CaptainShuddup says

That's witchcraft not science.

No different than a degenerate that always bets place on a horse with blue leggings, because it's his lucky color.

Exactly. Technical indicators are not very reliable. If they were, they would eventually fail to work since everybody would be trading them and the peaks and valleys would then disappear.

It's nice that Mr. Martenson has a PhD in neurotoxicology, but that in no wise qualifies him as a demonstrated guru of economic prediction. His last prediction was for stagflation in 2010, which didn't happen, and for a liquidity crisis in 2012-2013, which also did not happen:
http://www.businessinsider.com/chris-martenson-here-comes-inflation-and-deflation-2010-8
http://www.huffingtonpost.com/2010/08/09/chris-martenson-the-us-ec_n_675754.html

I don't see exactly what besides loose money is keeping the economy humming along, but who knows? One thing I learned in the last decade is that economics can't predict the economy.

donjumpsuit says

American's have always expected a set price when going to market to purchase goods. There is no haggling at Target when purchasing an item. An informed consumer does do comparative shopping, but more or less when they find a price there is no haggling

Not sure I agree, part of the success of the free market is the market, point is Walmart trumps an open air market in China.

tatupu70 says

economic predictions

I don't think there will be hyperinflation because of the aforementioned reasons. I think the dollar will continue it's devaluation which will shift jobs away from China. The US economy will not recover because of the FED's policies. I think income disparity will remain higher than usual because of the FED policies. FED spending will continue for the foreseeable future which will create a languishing economy for the foreseeable future, similar to Great Britain's conversion to socialism. I think that Spain and some of the other PIGS will be forced to leave the Euro. I think Germany will be forced to increase their consumption. I don't think China's pulling away from US treasuries will matter. I think that technology could make a difference to economic matters especially in health care. RE will stay about the same for the foreseeable future. Real economic growth will occur in South America.

I do not claim to be an Oracle, just a student.

zzyzzx says

I suspect that it's always been the norm, it's just that the cycle times may be shorter now.

Good point. I should have said EXTREME boom/bust is the new normal.

indigenous says

I don't think there will be hyperinflation because of the aforementioned reasons. I think the dollar will continue it's devaluation which will shift jobs away from China. The US economy will not recover because of the FED's policies. I think income disparity will remain higher than usual because of the FED policies.

Agreed.

mell says

indigenous says

I don't think there will be hyperinflation because of the aforementioned reasons. I think the dollar will continue it's devaluation which will shift jobs away from China. The US economy will not recover because of the FED's policies. I think income disparity will remain higher than usual because of the FED policies.

Agreed.

I think a dollar devaluation will cause hyperinflation eventually as our imports-oil and consumers goods will cost more. Oil dependency will take some of the sting out of it but there will be a period where imports of both oil and consumer goods are still in too large an imbalance

smaulgld says

I think a dollar devaluation will cause hyperinflation eventually as our imports-oil and consumers goods will cost more.

I don't think so as there are so many deflationary pressures not the least of which is the China valuing the yuan closer to its real value. This is really just making the true value pf the dollar apparent similar to gold (if the price of gold wasn't manipulated)

Homeboy says

zzyzzx says

I suspect that it's always been the norm, it's just that the cycle times may be shorter now.

Good point. I should have said EXTREME boom/bust is the new normal.

Extreme wealth disparity leads to extreme boom/bust cycles. It's how the wealthy make a killing every five years: crash the market/economy, take the bailouts, and make a killing on the rebound. The worst part is the whole process is a self-sustaining vicious cycle. There's really no way out. No way, that is, aside from extreme pain for the economy. Pain that would hurt the wealthy badly. So that's not going to be allowed to happen.
America is like Prometheus, bringing economic fire to the world and thus doomed to have its liver devoured by the vultures every day.

bullshitmagnet says

Deflation is dangerous because consumers would see advantage in not consuming (everything gets cheaper by the day, so it pays to wait and not buy anything).

This is a false claim, not entirely true. People still buy stuff even if prices fall and besides prices don't fall rapidly (although they could). It's not like everyone waits until black friday or cyber monday to purchase their goods each year. Hell most people don't even wait.

The reason why defaltion is dangerous is only because governments won't be able to service or pay their debts. That is why they prefer inflation over deflation as inflation allows governments to pay back debts with cheap money and borrow more.

Bubbabear says

As we have pierced the dreaded triple top, the sky is now the limit.
Will the bears ever learn? tut tut tut

John Bailo says

We're probably due for something like what happened in 1946:

This is a real possibility.

John Bailo says

We're probably due for something like what happened in 1946:

http://stockcharts.com/freecharts/historical/djia19401960.html

We could also be due for what happened in the 1950's.

Strategist says

John Bailo says

We're probably due for something like what happened in 1946:

http://stockcharts.com/freecharts/historical/djia19401960.html

We could also be due for what happened in the 1950's.

That'll happen around 2020 after the market is allowed to liquidate the unsustainable projects or “malinvestments” and allow interest rates to return to their natural levels. Once this occurs, interest rates can begin to play their role of coordinating production over time — matching the production of goods and services with consumers’ true time preferences for consuming today or saving today and consuming tomorrow. The pool of funding and the pool of real savings will be replenished. Unlike a credit-fueled boom, which is unsustainable, savings-based growth is sustainable. Consequently, over time, the economy will gradually return to health.