Right on target based on my prediction in May, 3% by labor day and 4.5% by June, 2014. I also predicted months ago that auto sales will turn red hot and inflation will rise to 15%+, THE REAL INFLATION RATE FOLKS, not the propaganda from the Ponzi Bubble builders.
I may agree with your interest rate predictions but not your inflation prediction because I think you are not considering what has caused most of the inflation in the past when it was high which was excess demand causing competition for labor which causes salaries to rise and this raises the cost of production which must be passed on.
In the past increasing the money supply created that excess demand but with today's high unemployment and with China being able to supply all the goods we could ever want the demand always gets met without increasing the demand for labor until there is a shortage of it. We are in a global economy and thus the old economic models that were based on what happened in a single country no longer apply. It can no longer be said that simply increasing the money supply results in inflation because it used to do that 30 years ago because the world doesn’t work like that anymore. China and other countries in their situation buy our dollars and stash them so they can keep the value of their currencies low relative to ours and thus keep us buying their goods. Until they stop doing that there will not be the amount of inflation we have seen in the past.
"I may agree with your interest rate predictions but not your inflation prediction because I think you are not considering what has caused most of the inflation in ...."
It is very rare to see a sensical (my word) opinion on this board. To bad it will be marred by the author taking the opportunity to reply with some schoolyard retort to my kudo.
Thats when I will back up the truck and load more TBT and TMV. My last purchases were 76.75 and 70.00 on those two. TBT was up 2 and TMV was up 3. You can't loose. Central Banks over the past 5 years have been issuing debt in tandem, that doesn't happen very often, ussually one country slows and they rest sort of cushion the slowdown. This time, everyone has slown at the same time, a "Perfect Storm". Six years ago before the credit crisis, the National Debt was just $8.9 trillion. The statutory debt limit today is $16,699 trillion so we have already breached it. No one in the news media even covers this. So now the FED CARTEL is starting the taper to a debt addicted economy. Ussually, there is only one bubble, but the FED has managed to create three bubbles, one in housing, one in bonds and one in the stock market. Just to inject some relativity in this discussion, the bond makret is four times larger than the dotcom and housing market combined and ten times larger than the stock market. THE BOND BUBBLE is the biggest bubble ever, the magnitude is stagering when you add in all of the exotic hedging, swaptions, etc. When this one pops the FED or anyone else will not be able to control interest rates and the resulting domino damage done to emerging markets etc. I feel we are about to witness a rise in interest rates of Jurassic Proportions never ever experienced by modern man.
An your point is fantasy. We were down to 0% and we have risen to 3%, the convexity is exponential, this is of Major significance. This is considered Jurassic not LOW. I don't think you have a concept of convexity and the ramifications of starting from a real low point. An infinitesimal increase is CONSIDERED ENORMOUS. This is called Convexity Risk. If you are an investor in debt especially at these low rates, you know you do not want to be long when rates even move a minute amount. But they have moved 200 basis points in a couple months, THIS IS THE MOTHER OF ALL MOVES.