Tag Archive

Silver’s Price Moves Are Affecting Investor Behavior

By John S. Tobey

Silver’s quick and dramatic price shifts now are affecting investor attitudes. Poring through the many silver articles reveals a widespread investment strategy: Buy silver to protect against (profit from) U.S. inflation and a collapsing dollar. Many are comfortable with that rationale alone. They believe that current U.S. government and Federal Reserve policies mean an... »

Silver Is in Blow-off Phase – Top Could Be Near

By John S. Tobey

Silver has entered a third growth phase, with the price increasing at about a 2,000% annual rate. Clearly, those gains are unsustainable. The question is, at what point will the trend reverse? 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 »

Gold: 1980’s Highs May Dampen 2011’s Enthusiasm

By John S. Tobey

Gold’s price is up, but what about its value? We know gold is supposed to protect us from inflation, but where does that protection begin and end? Gold’s claim to fame: Store of value The investable quantity of gold remains relatively static. In addition, gold doesn’t age and it has a history of trade... »

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/ – Insurer Reveals Inflation Expectations and Intentions

By John S. Tobey

Carefirst BlueCross BlueShield (DC) let its inflation thoughts and plans out of the bag recently. Here is the new language the company inserted into its general contract with health insurance customers: »

/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: »

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... »

Bondholder Alert: Disconcerting News from the Federal Reserve

By John S. Tobey

Fed Vice Chair states the obvious. Two lessons learned: Easy money can lead to leverage and speculation Markets cannot be counted on to self-correct Wow! That reaction is not for the lessons. It’s for the admission that the Fed had to relearn them. US financial history is filled with examples. Indeed, the Federal Reserve... »

Is the Bond Market Changing Direction?

By John S. Tobey

Whether you call it a bubble or not, investors’ love affair with bonds may be ending. Longer-term bond losses in the last three weeks have been about one-half year’s interest income. It may not seem possible. After all, corporate bond yields rose only 0.22% from their 3.74% historic low on August 24 to 3.96%... »

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