We all need to make preparations. If China's economy tanks, the global economy won't be far behind. In this global state, everything is tied to everything else. Dominoes anyone!!

read "The Creature from Jekyl Island" to understand everything about money and politics...outstanding summary of the last 200+ years of finance in the world...very accurate...

I agree wholeheartedly with your last paragraph. The "experts" generally get it wrong.

You said maybe a rate hike in Dec but certainly none before then. So you haven't changed your predictions according to my memory.

If I were "king" there would be no further QE. We would phase in spending cuts over a few years a that lead to a budget surplus if GDP kept growing at its current rate. Then during the next expansion, I'd hope to see a little inflation and a nice steep yield curve, signalling time to hike rates. It's easy to be an armchair king / central banker-- probably much harder in the real world.

I actually think monetary and fiscal policy don't affect the economic cycle to the extent policy-makers think it does, but I think a long-term structural deficit is worse than they think it is. Again, this is just from me looking at my little tiny corner of the economy, centered around printed circuit assemblies. I'm keenly aware I'm not an expert.

Sure, why not. That is a revision of previous call for rate hike in December.

Are you predicting no rate hikes this year and some QE in the next six months?

Undoubtedly. It won't work.

Do you think the feds will try more QE in order to kick the can again?

Exactly.

I did some inverse ETF's a few years ago. Quantitative easing made inverse ETF's hard to swallow. In a sane world, quantitative easing would be illegal, but this world is no longer sane. It is tempting to play the VIX in this instance, but I just don't trust governments enough to do so.

Back in 2007-2009 when I traded professionally and had full and immediate access to information and markets, I ran a trading desk that shorted, in various ways with various instruments, all sorts of things. Even with markets' huges drops, we occasionally got crucified by the incredible but short-lived rallies. Now, sitting at home with just a computer and no instantaneous access to information and markets, the only shorting I do is a little inverse S&P ETF. Not only are there the occasional rallies, but governments, as we saw in 2007-2009 and recently with the Chinese government, make shorting very difficult. I'm not even sure how to short China. As for buying it, I'm sure there will be a time when that is appropriate. I would be most inclined to buy larger companies that have US ADRs so the accounting is a little less murky. However, at this point buying is like trying to catch a falling dagger, and my preferred asset is cash.

Are you shorting China? If so, is there a time before the end of the Chinese government that it is worth reinvesting in China? Several colleagues of mine say that China is in some ways more capitalistic than the US over the last decade. I really am not trying to outfox the market. What I want is something left for all my effort.