Bill Greiner, UMB Bank’s chief market strategist, predicts that the economy will recover in 2010 but says the stock market remains a dangerous place for now. The problem with the market is a lack of visibility about the financial system’s health, he told a group of the bank’s St. Louis customers today.  Greiner thinks U.S. unemployment will top 10 percent this year, and he expects investors to get hit with a lot of bad news:

Corporate profits are going to collapse to a tune that we haven’t heard in many decades.

Later, he added:

I would suggest to you not to put a lot of money to work in this market. Don’t try to catch a falling javelin.

The Federal Reserve is doing the right thing to combat deflation, Greiner said, but he worries that the Fed’s massive creation of bank reserves will lead to an inflation problem before long:

I would suggest that inflation, over the next 18 to 24 months, has a very good shot at exceeding 5 percent.

That’s far above most economists’ medium-term forecast for inflation.

When the economy begins to recover next year, Greiner emphasized, the recovery will be led by government and business spending, not consumers. As a free-market advocate, Greiner said, he’s not thrilled about the government’s taking a bigger piece of the economic pie. Then, however, he referred to a chart that showed relatively high government spending in the 1950s and 1960s, and he added:

We’ve been here before as a society. We’ve figured out how to deal with it, the markets have figured out how to deal with it, and we’ve moved forward.