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Tuesday, July 21, 2009

Bill Bonner peers into the future

Two years…or even one year…ago, we could look ahead and see what was coming with a fair measure of confidence. There was clearly a bubble in housing and the financial sector. Surely it would pop.

Now, we look through the glass darkly…

The bubble has popped. The government as responded as we thought it would. The markets have bounced, as we thought they would.

But now what? We’re waiting for the next leg down. If we’re right…stocks will fall hard as investors realize that there will be no quick recovery.

And then… our visibility is poor… but the feds are bound to come back with Stimulus II. It will probably involve quicker-acting tax cuts. And it will probably cause more jitters in the bond market…and eventually, rising inflation levels.

When? How much? Hard to say…
-- from "An Intelligence Test for Bankers" by Bill Bonner

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