A few weeks ago, we suggested that contrarian investors should consider investing in bonds, notwithstanding our long-term negative view about the US dollar and US bonds. Our main concern about US bonds, centers on our belief that the US will have no other option but to print money and that the Fed’s priority will be to support asset markets and not to combat inflation.
I may add that the Fed has no idea of what constitutes inflation because the common man’s cost of living do certainly not only increase by “core inflation” but by headline inflation plus about 2% per annum. In time, the Fed’s monetary policies, which are not only misguided but also irresponsible, will lead to far higher inflation, a weaker dollar and rising interest rates. However, two months ago, sentiment about bonds was extremely negative and, for this reason, we expected a bounce in bond prices. Moreover, it was our view that weakening home prices would lead to slower consumption of growth and a weaker economy.
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Source:- IIPM Editorial
Visit also:- IIPM Publication, Business & Economy & Arindam Chaudhuri Initiative
I may add that the Fed has no idea of what constitutes inflation because the common man’s cost of living do certainly not only increase by “core inflation” but by headline inflation plus about 2% per annum. In time, the Fed’s monetary policies, which are not only misguided but also irresponsible, will lead to far higher inflation, a weaker dollar and rising interest rates. However, two months ago, sentiment about bonds was extremely negative and, for this reason, we expected a bounce in bond prices. Moreover, it was our view that weakening home prices would lead to slower consumption of growth and a weaker economy.
For complete IIPM article click here
Source:- IIPM Editorial
Visit also:- IIPM Publication, Business & Economy & Arindam Chaudhuri Initiative
