One key perk to working alongside investing seers is the opportunity to ask them the big questions. Wondering what lies ahead, I asked Casey Research Chief Economist Bud Conrad and technical analyst Dominick Graziano to share their views on what investors should expect in 2015.
These two gentlemen blow me away. Bud can make big-picture forecasts with uncanny accuracy. Dominick is a pure trader, relying on historical charts and graphs and seeing relationships in a way I had never before experienced. He is totally unemotional in his approach and makes decisions based on what the charts tell him. Like Bud, Dominick has made so many calls ahead of time I’ve stopped keeping track.
Here’s what Bud and Dominick had to say.
Dennis Miller: Bud, I’ll start with you. We’ve experienced a lot of changes in the last few months. A new Congress is being sworn in, the Federal Reserve has stopped Quantitative Easing, and the energy industry is now quite volatile. What do you see as you look into 2015?
Bud Conrad: To get the discussion positioned, I’ll make some summary evaluations: the US and China are doing comparatively well. I gave a keynote speech in China to a huge mining conference where everything is booming, including the pollution. The US is benefiting from the reflation of our monetary bubble and hasn’t gotten to the end of this round yet.
Europe is declining from sanctions, burdensome bureaucracy, and weaker peripheral nations of Portugal, Ireland, Italy, Greece and, Spain (PIIGS). Japan has returned to slow growth despite money printing and should be a warning to the rest of us that money printing has its limitations.
Today governments and central banks can drive the markets even more than traditional measures like profits or rational supply and demand. So to predict markets, we need to predict the actions of the big players: central banks, government regulations, sanctions, political alliances, and wars.
The expansion of government debt is at record highs for many countries. We will see further money creation by most of the world central banks to manage the government deficits and big private debt by keeping rates contained. That means that the Fed will be back with some form of money creation, probably in 2015.
