Mogambo Guru
9241 54 St. N., Pinellas Park, Fla. 33782
MAY 2 ~ Inflation is everywhere, and yet the yahoos of the world are busily
buying T-bonds as some kind of bizarre "safe haven" from the stock market,
even though it is axiomatic that bond prices will be dropping soon,
apparently unaware that bond prices move in the opposite direction from
rates.
We have already had five, count 'em five, ineffective Fed rate hikes to try
and keep inflation at bay. But inflation just keeps getting worse and worse,
as I have pointed out for months, because that is how interest-rate hikes
work; it initially causes higher prices simply because it imposes higher costs
on borrowers, and the higher costs dissuade people from borrowing money
and contributing to GDP. And another rate hike, the sixth, is guaranteed to
be announced in just a matter of weeks.
Speaking of yahoos, the Street stock touts are busily mouthing the mindless
palliative mantra of "the long run." They never mention that the stock market
is outrageously overpriced, or that there is not one instance in all of history of
buying stocks at such ridiculously lofty levels, especially in the face of
increasing inflation and interest-rate hikes, that has ever paid off, "in the long
run." What you get is ruination. Ask the Japanese. |
