The parabolic structure in stocks will collapse. It’s going to take a collapse in the stock market for Yellen to reverse the taper and I think she will not only reverse it, but I think she will double down on QE. Instead of $85 billion a month, we may get $150 billion a month.
The problem is that when a parabolic structure breaks, you can’t put it back together.
The Fed is going to make the same mistake when the bubble and stocks pop. They’re going to follow the same game plan they did in 2008. They’re going to get the same results. Liquidity is going to flow into the commodity markets. It’s going to spike commodity prices which is going to make cost of living expenses for the average person go through the roof, and that collapse is discretionary spending and that will send us down into another recession/depression that I expect will be worse than 2008, and I expect the stock market will fall below 666.