Posted on 02/12/2011 7:33:56 PM PST by sickoflibs
Interest rates have long since bottomed out, and will be headed higher for the forseeable future. Keep your bonds short. Wait until the inflation arises, and the Fed is too late to keep up, and has to purposefully put the economy into recession with high interest rates to tamp out inflationary expectations. Buy long bonds at that peak.
It’s just a very long downward interest rate cycle that we’ve been going through since Volcker. Now, they’ll go up for a long time. Don’t get burned with long bonds.
Agree. I moved out of bonds some months ago. And if the Fed doesn’t raise rates the bond vigilantes will do it for them.
Not all price spikes are due to inflation. There’s a distinct possibility that spikes in food and energy are a product of heavy Chinese purchases. And the flooding in Australia ruined the winter grain crop. There has been one other large crop failure this season, but the details escape me just this minute.
I agree with your comment on salaries. And you can add outsourcing, insourcing, and globalization to the pressure on American salaries.
Who is gonna “fix” Bernanke??
;-)
The madness sweeping over the Arab World, the Obamatrons (& handlers) have already plotted for US — too!
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