We delve into the market internals and the P/E Ratios of most stocks when taken as a whole are in never before seen valuation levels. We are not talking about just the high growth flyers but industrial companies with stagnant or declining growth like Caterpillar (CAT), Coca-Cola (KO) and Exxon Mobil (XOM) in areas facing longer term structural headwinds.

In short, the Federal Reserve should have stuck to their scheduled 3 rate hikes for 2016, and now they are way behind the Rate Hiking curve, and the stock market bubble is clearly screaming that the Fed has already lost control of "Running a Hot Economy".

The Fed is going to have to play catch up in 2017 and raise the Fed Funds Rate at least 4 times and maybe more to curb some of the excessive valuations in the stock market otherwise risk a higher likelihood of an outright Market Crash Scenario.

If we look back to the 2000 Market Crash, and the 2008 Market Crash and compare the current overall Stock Market valuations to these recent time periods, it is obvious that as the cheap money punchbowl is taken away, and interest rates are raised back to more normalized levels of 3 to 5%, which an aggressive infrastructure, deregulation and tax friendly regime initiative which the market is pricing in is implemented and corresponds to.

Then inevitably the stock market which has been juiced on the back of ZIRP financing is going to crash as the Fed plays catch up in hiking the Fed Funds Rate and borrowing costs normalize across the financial spectrum. Unfortunately for Donald Trump the Federal Reserve is going to leave his administration with holding the bag on the normalization of interest rates after 8 plus years of ZIRP back to more historical norms, and the resultant market crash will be laid at his feet as well.

Video Length - 00:15:18