Saturday, November 13, 2010

The Face of Things to Come in 2011 - Slippery Road Ahead

For a while now, I have been following the discussion regarding the second quantitative easing undertaken by the Fed, and I must agree with the point of view portraying it as "pushing on a string". More and more it is looking like Ben Bernanke is blowing yet another bubble. With interest rates at near zero and many elderly and retirees being squeezed to their last cent thanks to safe investments such as CDs and Treasury's yielding next to nothing, it seems Mr. Bernanke has no problem throwing coal to the speculative fire already rife with hedge fund money. This is no path to prosperity and it only serves to create further imbalances in the system with detrimental effects felt globally. Throwing the dollar under the train will result in potential trade wars, which according to Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo (GMO) has already begun. This whole Maria Bartiromo interview is worth watching with great advice on asset classes that have the best chance to save the day in 2011.

The Fed must be reigned in before irreperable damage is done. Instead of a constant idealogic tug of war The Congress needs to get their act together before sensible policy alternatives are even open for discussion. It's time for some serious pragmatism. The kind that president Barack Obama is supposed to be good at. Fasten your seatbelts, there is turbulance ahead.

1 comment:

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