Will we go in recession again? This is a question many wonder if a recession is likely to come again. Well. The answer is yes!
Historically, the US economy has had many ups and downs (recessions). Look it up and you'll see that in the last century, the US economy or the US markets, have gone through more than 8 or 10 recessions if i'm not mistaken. Every time before we went to a recession, a number or 3 to 6 years of good strong years in the US markets have taken place. We are currently in a 4th year of strong US market upside. Yes!! Believe it or not! Strong US market and somehow stronger economy. Why? How? Well, is all about injecting money to the economy. Yes! Making money out of thing air and put in it to work. The FED invest or buys bonds and mortgage securities when the markets are low (cheap). Once this happens, smart money people or entities (hedge funds, big companies with money = Wall Street) do the same. They buy and invest in markets and markets go up. Then, after things get better, the individual investor (Main Street) puts money in.
Now, what happens after the FED's stops putting money? What happens when Wall Street and Main Street stop and pull their piggy banks out. The answer is: fear is on. Everyone pulls their money out and a "top" on the markets (long term speaking) is called.
Unfortunately, once this "top" is in, the regular investor, the public, and most people won't know this. After a number of 3 to 12 months, a recession "the bottom" is reclaimed. Historically, and as far as i remember, recessions have lasted 9 to 18 months. The Great Recession of 2008 to 2009 lasted almost past 2 years!
So, based on what i said and with my resources - and we can call it guessing too : ), the US markets or US economy will bubble up and pop by late 2013 through mid 2014. The decline will last again either 9 through 18 months and the financial mongers will start come out of their holes claiming that the US is going down and China will take over the world hahaha.
So, the new recession will be called in 2014 through 2015. There it is! If i'm right, you'all better send me a check for my commissions or for saving you money : ) The FED will stop pumping money soon, housing will react and go sideways (we hope), smart money investing (Walls Street) will take out their money in order to cash out and celebrate all these 4 years of money making and the regular public, consumer spending, discretionary spending, consumer sentiment will drop.
Just remember this: what ever goes up, must come down.
But, no worries!! after 2015 or 2016, United States will rally and kick ass like a champ for many years. Then, we will start a new era where people will want to come to live the American dream again.
I'll explain how this may happen later. Just a hint: Energy boom. The new United States of Oil and Energy of America (i hope too)
Pepe
-- This is Market Analysis, not a recommendation.
