One of the goals of central bankers as been to kill in the minds of investors the threat of inflation.
To do that in part they needed to curtail the bull market in gold prices. Their weapon of choice became the bond market. The easy-money spigot easily spilled over into equities and real estate.
The ploy reminds one of the day President Reagan was shot and Alexander Haig, then Secretary of State and a former Army general, said: "I am in control here." But the current debate over who should succeed Bernanke as Fed chairman illustrates the real truth: this lighthouse is sans keeper.
In today's WSJ are two brief articles worth a look. If you're a maximum pessimism investor--and we are--you want to own agriculture despite the current so-called commodity malaise.
Demand and supply problems come and go. Except by proxy, demand for US government debt is largely coming from the Feds. Safe harbor buying is only icing on the pineapple upside down bond cake.
The US economy appears in stall mode, extending the possibility of more phoney money creation. Like many things, it can be a good thing as long as it lasts. Forever, however, is no part of that equation.
That's why you should welcome maximum pessimism into your investing abode. It's the obverse side of irrational exuberance.
http://online.wsj.com/article/SB10001424127887323854904578637453999548858.html?KEYWORDS=Heard+on+the+street
http://online.wsj.com/article/SB10001424127887324170004578638082108558320.html?KEYWORDS=heard+on+the+street
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