Story Comments

Inflation concerns are way overblown AT THIS POINT. The Fed's enemy is deflation and that's way they are doing pretty much everything to stir inflation fears. As for their treasury buying, there is no way but to buy much, much more of them - likely 300-500 Billion every quarter for many quarters to come. Of course they cannot and will not announce that at once. It will be quarter by quarter. The Chinese cannot save the US - their exports drop dramatically and with them the amount of dollars to recycle into US treasuries. The long bond will reach 2-2.5% before it gets to 5%, make no mistake. Apart from the govt. nobody has pricing power right now, inflation will decline further and REAL Yields are already pretty attractive at about 2.5%.
Inflation will be THE problem from 2015 onwards - but not before that.

I guess commodities are a good bet.

Posted by: Stephen Mapes on Investment Postcards from Cape Town

I read all these so called experts. I yet see any tangible answers to the problem other than that the government will deflate it currency to payoff its debt. What that means is that we face a lowered standard of living going forward for generations to come. We do need innovation and productivity. Kennedy created massive innovation and productivity by going to the moon. Yet I see very little in the stimulus plan or budget similar to that which would bring about such new innovation. I see only redistribution of wealth and very little in infrastructure reinvestment. I see pork, massive potential corruption and payoffs to contributors to get re-elected. What bothers me the most, is that Goldman Sachs was one of the organizations that developed and engineered all this toxic paper, yet you find their previous managers and Board members involved in all of this waste, fraud, and mismanagement. Loaning $100’s of billions of tax dollars to banks, that only a month ago could have been bo...(Read more of this comment)ught by the government for a song and dance. Something smells here. The President needs a moon shot; investment in alternate energy, nuclear power, drilling offshore and Alaska to reduce our subsidy of our enemies and a massive improvement in the education of our children in math and science. We need to bring our troops home from most of the world and let them defend themselves.(Show less of this comment)

Posted by: anonymoustroll on reddit.com

> That will surely trigger a massive drop in stocks, and probably a recession. Uh, the article was written May 22 2009... ...I think we've been in recession long enough that we don't have to worry about some completely different, yet exactly identical recession people may or may not be aware of being "triggered". ...what you have to worry about is very, very different.

Posted by: asharp45 on reddit.com

Seems like any other market - China owns a ton of something. If they sell them all at once, prices will collapse. The shift will be slower than most (including me) anticipated. China and other nations are slowly shifting away from the dollar, and probably face pressure from the US to do so in an orderly fashion. I'm just guessing on that last point, btw. It's like Russia's supplies of Palladium. They have tons of the stuff apparently, but keep a tight lid on how much they're selling, what their mines are producing, etc. No need to tip their hand unless it will benefit them.