aint going to be no taper ... that is why bernackie is on his way out!
the govt will inflate ... otherwise bonds would be headed up not down
2% is a great rate in a deflation but not during inflation
war is coming in middle east too
It has been known for quite some time that the stimulus was actually killing the patient. Big Ben, who has lost nearly all credibility (and maybe his PhD), found himself in a damned if you do and damned if you don't situation. And all of this has come about by continually trying to thwart market forces, which, although delayed, will win out in the end and the inflationary pressures we've long known to be in the offing are soon to begin to show their impact.
The trouble is such that the mountain of additional debt created, all to be squandered as we've known the government to do especially with their largesse with the banking industry, has created a monstrous imbalance that will be quite problematic as we move forward, but forward for how long is anyone's guess.
Couple that with the burgeoning derivatives time bomb and it will be hard to discover any other outcome but collapse of the system as we know it. As the truth becomes more readily apparent to even the brighter segment of the Joe six-pack crowd, our positioning in SLW and similar arrangements will be the place to be. The trouble will be in the valuation, however. Who will want to exchange hard assets and even an equity position in a company that streams real money for fiat. Exchanges of substance for substance, value for value will again come to the forefront.
I see a day coming when a pre-1964 quarter will get you a can of beans and maybe not one of the bigger ones.