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Following 23 years with JPMorgan, Simon Lack founded SL Advisors, LLC, in 2009. Prior to that, Simon was CEO and founder of the JPMorgan Incubator Funds, two private equity vehicles that took economic stakes in emerging hedge fund managers. From the late 1980s through 1999 through several bank... More
My company:
SL Advisors, LLC
My blog:
In Pursuit of Value
My book:
The Hedge Fund Mirage – The Illusion of Big Money and Why It’s Too Good to Be True
  • Trading Inflation For Growth 0 comments
    Sep 17, 2012 2:34 PM

    In yesterday's press conference, Steve Liesman from CNBC asked a highly pertinent question of Chairman Bernanke. Steve asked whether the explicit focus on employment meant that the Fed was now willing to tolerate a higher inflation rate than would otherwise be the case. Bernanke answered predictably by noting that the Fed by law has a dual mandate (maximum employment consistent with stable prices). But in thinking about his comments afterwards and the way they've positioned themselves, it seems to be unlikely the Fed will spend any time worrying about inflation until the employment picture improves. Of course there isn't much evidence of inflation anyway, but we are virtually assured, based on his comments, that if or when things do ultimately pick up the Fed will be a long way behind the curve in terms of raising rates. Negative real returns are here to stay for bond investors. Bernanke made the case for real assets yesterday, including gold which we own through our investment in the gold miners ETF (NYSEARCA:GDX).

    Disclosure: I am long GDX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Themes: long-ideas
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