"When the Fed prints money - they are inflating, counterfeiting/stealing and redistributing wealth.
On that -- we can all agree.
And inflation always leads to a massive misallocation of capital and much of it has seen it's way into commodities."
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The Fed, by design, is suppose to be on inflation watch and a security guard for the dollar.
Be that as it may, it is interesting to note, the Fed inflates equities,housing and commodities but not the consumer staples, at least from where I'm standing. Yes,there is inflation out there but not in the consumer staples supply side of the equation. Could it be because there is always an easier game with virtually far more liquidity, far more players ?
Housing inflation, well witnessed after the dot com crash and the Bush/Fed interest rate cuts saw a huge influx of dollars with virtually no place to go; all the refi's, building expansions, and new home constructions. Almost everyone that could did get in the game. Late '05 Natural Gas exploded upward as well the Oil debacle. And now as housing continues to correct the equity side supply is getting a nice push into year,s end after lows seen in mid July.
Is there no end to the Fed's ability to flood the street with dollars ? And why do they continue to want to ? |
