Economic Advisor:Where We Are and What You Can Do

The key issue is that the road we are on right now is going to end,predicted Mohamed El-Erian,chief economic advisor at Allianz.Central banks will no longer be able to borrow against the future;we're getting less growth out of the system;the political regimes are getting more extreme.That has massive implications on how you're going to position yourself at this T-junction.The Fed doesn't want to be forced by the market into a change of policy stance.The market welcomed the rate hike;now its view is shifting.
We never achieved liftoff.We never got to what this economy is capable of,and that's a tragedy.*
This year,it's hard to get a recession.I think the probability of a recession goes up to about 30% for 2017,and then we get to the T-junction where major decisions have to be made.We have financial prices separated from the fundamentals.We can't let the currency markets carry all the burden.*
I think this year will be a great year for those who can pick the right stocks,and there's going to be lots of opportunity.I still think you need cash;you need 25-30% cash right now,advised Dr.El-Erian,who holds degrees from both Oxford and Cambridge Universities.His new book is "The Only Game in Town:Central Banks,Instability and Avoiding the Next Collapse."