The time machine is in operation today. After using the time machine for an extended period of time, I have become accustomed to its fluctations. It generally follows an upward or downward trend but fluctuates day to day with a sawtooth pattern.
Today, it became apparent that the trend is aiming down at what appears to be an accelerated trend. As to where we are in calendar time, I would estimate that we are approaching 2003. That is an approximation. However, it appears that we may be picking up speed at a logarithmic scale. The real estate bubble has been definitely pierced but another bubble appears to be forming in commodities as people try to protect themselves from the depredations of the Fed. If the commodity bubble increases at a fast enough pace, the time machine will probably increase the rate at which the real estate and stock market recede into the past. The commodity bubble will probably attract dollars from the stock market and the real estate market with magnetic force. As commodities increase, the other markets will probably contract. Dollars will move from one market to another but the Fed is determined to see that the total quantity of dollars only increases and never decreases as they push inflation relentlessly higher. As my hero Milton Friedman said, "Inflation is always and everywhere a monetary phenomenon". Ben Bernanke and the Fed are the agents of inflation.
I concur with your assessment of Bernanke vs Volcker and I also am not keen on long-term debt instruments. Today in the Treasury's weekly auction the six month t-bill yield was 1.825 if I read the results correctly. My investment committee held a telephonic conference and agreed that it can not authorize investing in t-bills at less than 2%. Therefore, it will have to come up with some new ideas before the t-bills mature in March and April. We have agreed that Fremont (FMT), Incymac Bank (IMB) and Thornburg are not acceptable choices.
I wish there was some way that I could accelerate the time machine back to 1974, but I have not found one as yet.
When is ITIC going to report its fourth quarter and annual results? I would have expected them to be out by now.