August 10, 2006
I have been out on a limb for some time, noting over six months ago that we would see a major stock market correction this year. My argument: Consumers have held up the economy for fifteen years and are running (have run) out of money. The federal reserve, faced with a slowing economy will stop rate increases even though inflation threatens. The fed politically cannot raise rates in a slowing economy even in the fact of inflation (which should be its primary concern). The result -- tough times for a while in the stock market.
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