Tag Archive

Forget The Fed: Business Has Its Own QE3

By John S. Tobey

Official “Quantitative Expansion” (i.e., the Federal Reserve’s increasing the money supply by buying bonds) is no longer necessary. The money supply is now growing through normal, homegrown forces, and the growth started just as the Fed’s QE2 ended. This article is posted on SeekingAlpha.com »

Easy Money (4) – Investment Steps We Can Take

By John S. Tobey

The Fed issues its statement on Wednesday (April 27). What will be the outcome? More importantly, how should we invest as a result? This article is posted on SeekingAlpha.com. »

Easy Money (3) – Fed Ignores Those Harmed by Policy

By John S. Tobey

With all the talk about the Fed’s easy money actions, there remains one subject that is largely ignored: Who’s paying for the Fed’s largess? With low interest rates, lots of money and good intentions (increase employment and bolster the economy), the Fed’s easy money policy seems like a win-win situation. The only “cost” appears... »

Easy Money (2-cont.): Fed Policy Understates Money Growth

By John S. Tobey

During the Fed’s easy money policy, official money supply growth looks moderate. Therefore, there seems to be little indication of high inflation risk. However, the easy money policy has caused money supply dislocations. When adjusted for these, money supply growth increases appreciably, thereby raising inflation concerns. Here’s the situation… This article is posted on... »

Easy Money (2): U.S. Inflation Now at 4% – How Fed Dismisses the Signs

By John S. Tobey

In “Easy Money (1): Fed Touts Flawed/Risky Rationale,” we discussed the Federal Reserve Open Market Committee’s (FOMC’s) weak rationale for easy money. Today, we’ll cover how the FOMC dismisses clear signs of 4% inflation. This article is posted on SeekingAlpha.com. »

Easy Money (1): Fed Touts Flawed/Risky Rationale

By John S. Tobey

Federal Reserve Vice Chairwoman Janet Yellen, attempting to explain the wisdom of the Fed’s easy money policy, instead exposed its weak reasoning. To understand what is going on, we need to come at it from three points of view: Easy Money (1) – Fed Touts Flawed/Risky Rationale Easy Money (2) – Fed Dismisses Inflation’s... »

Fed’s Easy Money Policy Ignores an Important Warning Sign

By John S. Tobey

A key indicator is flashing a warning for the Federal Reserve Open Market Committee (FOMC) to back off its easy money policy. But the signal goes unheeded. How important is the indicator? Very. Here’s the situation… This article is on SeekingAlpha.com »

PIMCO’s Bill Gross Cashes in U.S. Treasurys. What Should the Rest of Us Do?

By John S. Tobey

It’s official. Bill Gross is divorced from the U.S. Treasury. The PIMCO Total Return Fund, the largest U.S. mutual fund at about one-quarter trillion dollars, now holds no U.S. Government securities. What’s up? Is the U.S. about to be downgraded? Is it bankrupt? Or is this a political thing? None of the above, according... »

Avoid Mixing Political Opinions and Investing Decisions

By John S. Tobey

I am seeing more investors incorrectly use political opinions to substantiate their investing actions. Political beliefs are often emotionally charged, thereby skewing reasoning. The result: Poor investment decision-making. »

The Fed’s Unbalanced Decision: Stockholders Win, Bondholders Lose

By John S. Tobey

The Federal Reserve Open Market Committee decided to maintain the status quo (option #1 in the previous article, “Forecast for Bondholders: How the Fed’s Dilemma Will Affect You”). What does this decision mean for investors? »

Forecast for Bondholders: How the Fed’s Dilemma Will Affect You

By John S. Tobey

Previously, I discussed whether the Fed was paying attention to inflation’s apparent resurgence (“Tame Inflation Just Growled – Is the Fed Listening?”). Today, let’s talk about the box the Fed is in, what its choices are and how the direction chosen would affect bondholders. (more) This article is posted on SeekingAlpha.com »

Tame Inflation Just Growled – Is the Fed Listening?

By John S. Tobey

The Wall Street Journal’s lead article says it all: “Global Price Fears Mount” (By Brian Blackstone and Marcus Walker, January 24, page A-1). Rising inflation concerns have reached the “something must be done” stage. Everywhere except here in the US, that is. Now that anti-inflation actions (i.e., interest rate increases) are being discussed or... »

/Quick Point/ – Fed Succeeds by Talking – Growing Signs of Inflation

By John S. Tobey

The Federal Reserve (Chair Ben Bernanke, in particular) would like a tad more inflation and thinks its plan to buy bonds could accomplish that goal. Now there are signs that just talking about it has done the trick. Here are three examples: »

/Quick Point/ – China’s Interest Rate Hike Is Good for the US

By John S. Tobey

China took a positive step yesterday that will benefit not only itself, but also all those countries engaged economically with it, including the US. Here’s why… »

The Fed’s QE2 Decision – Let’s Hope It Includes an Exit Strategy

By John S. Tobey

Fed watching is in high gear, looking for signs that the Federal Reserve will initiate “Quantitative Easing 2” (QE2): Buying more bonds to keep interest rates low, foster economic growth and boost employment. Then there is the widespread discussion of how the news – whatever the decision – will affect the bond and stock... »

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