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Expect a market meltdown before the 2016 election: Stockman

The markets are in for a "rough patch of time," at least according to market contrarian David Stockman.

The Federal Reserve has reached a "ridiculous point" keeping interest rates this low for this long and its those policies that could spark a massive correction between now and the 2016 election, the former director of the OMB said Tuesday on CNBC's "Futures Now."

"To be with emergency zero interest rates this late in the cycle has simply left the Fed between the biggest rock and hard place that I think is known in monetary history," he said. We're currently in month 83 of zero interest rates.

"I suspect unless the market crashes between now and [December], they will have to raise interest rates by 25 basis points," added Stockman. "[But] they will try to say one and done and wrap it in incoherent Fed speech."

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According to Stockman, by not raising rates thus far, the U.S. central bank is only proving that it is "playing by the seat of their pants." And it's only a matter of time before its "gibberish and incoherent" language weighs on the market and brings about the next correction, he said.

"The market has been cycling back and forth and people are beginning to realize the whole thing is a farce," he said. The S&P 500 has seen red for much of the past two weeks, having rallied in only four sessions since the start of November and now tracking for its third down month in the last four.

"The central banks have lost control and you have a few daredevils left who are trying to bid it up," he said. "One of these times we are going to plunge and there won't be any bid when we go down."

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Stockman used the economic slowdown in China, hardships in Japan as well as the crash in commodities and a decelerating U.S. earnings picture as examples of some of the indicators pointing to the undercurrents of a weak U.S. economy and stock market.

Despite his conviction, he did admit it's difficult to tell when the next shoe will drop, as he has been calling for a "major market meltdown" for quite some time. Still, he believes the market is in "utterly uncharted waters" and as fewer stocks are making new highs, the market is "vulnerable to an unexpected and huge plunge." Nearly 70 percent of stocks in the S&P 500 are trading 10 percent or more from their respective 52-week highs, according to FactSet.

"This is really the final spasm of the bull. When this one is over I think we are going down for the count," Stockman added. "That will happen I think sometime between now and the next election."

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