I have not written much about the markets for some time. I am too lazy to write. Since a month back, we've seen unrest in the Middle East, the overthrow of the Egyptian president, the massive earthquake and tsunami in Sendai... To me, all these are noise.
I think we are about to enter the third and final stage of the bull rally, the one where inflation in the US finally hits above 2.5%. It should happen by June 2011 and interest rates will rise swiftly. How long have we got thereafter? Perhaps a year more. If we're lucky 2 more years. Yes, it's hard to believe that despite all the turmoil, I think the bull rally will last. But I believe that's how the cookie will crumble.
By 2012 / 13, the US should hit a stagflationary stage, where GDP growth barely surpasses 2% and inflation hits 3% and above. Stocks will flounder. Residential property in Singapore will correct at least 30% but the government will make some emergency measures to prop it up.
Time to hedge your portfolios, buy some commodities.
