The expiration of the payroll tax cuts for all is yet another wrinkle, and one that may be lost in the translation of this deal. Now, I never believed that the payroll tax cuts were a good idea in the first place; not because I don't want more money in the pockets of working Americans. Temporary tax cuts, especially those that directly support an already fiscally challenged entitlement program such as Social Security are just a bad idea; especially when they have to be taken away.
All of this uncertainty could make for an interesting year in the markets. The optimist in me says that we can address these issues, bring back some fiscal discipline and get the economy growing again. The pessimist sees staggering hurdles ahead that will be difficult to navigate, especially with a dysfunctional government that is unable or unwilling to get out of the way.
Buckle up and hold on tightly. It's likely to be a wild roller coaster ride with some fairly wide market swings that might provide some opportunities for those with some dry powder. I expect that gold will be very interesting to watch this year. With all of the uncertainty and the presumption that one of Uncle Sam's only remaining options to combat the fiscal mess that's been created will be via inflation, precious metals should have an interesting run.
That's enough of this fiscal cliff nonsense, at least from me. It's time to get back to value investing.Follow @JonMHellerCFA