Posts by "matt"

I enjoyed your presentation. I agree that the Fed is facing very grave problems with trying to keep bond yields down.

There are a few points about the dollar I would like to hear your opinion on...

I believe that the rise in bond yields is due to an inflation premium being placed on interest rates.

And this is why, when the public expects further inflation, Fed increases in reserves are raising, rather than lowering, the rate of interest.

As you stated the Fed is left with two choices, stop monetizing debt or increase their efforts. The market is saying increases in Fed purchasing are leading to an increasing risk of inflation and rising yields. The opposite of what the Fed wants.

When the acceleration of inflationary credit finally stops, the higher interest rate will put a sharp end to the boom in the capital markets, and an inevitable recession liquidate unsound investments of the inflationary boom.

I believe that commodity prices have risen due to inflationary expectations and China stockpiling. However what happens when their reserves are full? It takes years to build additional storage tanks for oil etc.... http://www.fundmymutualfund.com/2009/03/reuters-china-oil-goverment-reserve.html

The currency P/E on the S&P is 120.... I can't imagine paying for stock whose current rate of earning would take 120 years to pay back my original purchase price. http://www.chartoftheday.com/20090522.gif