GregT

GDP Manipulation? You Should Consider Shorting the Market

It is certainly true that the US government plays a huge part in manipulating the economy and many aspects of consumer investing/purchasing. This has been the case for decades going back to before the Great Depression. It is also true that the amount of manipulation has increased over the years.

But the big question is not whether or not this manipulation exists, but when it might come home to roost. While US debt has increased dramatically in the last couple years and will continue to do so, it is unclear that the heavy debt will cause a major problem for the US economy or the markets in the near term - the next couple years. It is certainly unhealthy, but the markets care less about government balance sheets than they do about corporate profits. All indications are that corporate profits will be recovering - perhaps strongly. At least in the near term, it is likely that markets will remain positive. Short term technical pullbacks are certainly a possibility, but the market is likely to be higher in 1 to 2 years.