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Originally Posted by nostatic
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The market is going to correct as all markets do. However we have puled back from the abyss and people have caught their breaths. We have had a rebound in stock prices since march.
The emerging world is now coming out of the shadows and is starting to grow at pretty rapid rates. Which should bode well for companies with international exposure. The problem with US bonds is that people are going to be chasing those lower rates of return with with ever more amounts of capital. The risk to reward ratio is going to mount in Bonds. Bonds are traditionally a safe haven.
With the Chinese pulling back from our bond markets the only buyer of recourse is the FED iteself. To do this they are printing money. This is recognized by most people as a ticking time bomb.
Ironically corporations can be profitable even with Americans in record numbers being unemployed. As those companies with international exposure remain profitable.and with a modest 3% growth rate companies may just decide they do not need to rehire. The concern in the stock market is that with a resurgent USD US exports will fall off.
The long term effect on the USD is not one of optimism. The policies of our current administration if implemented will only excerbate the problems.