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Prepare Yourself for the Inflation Invasion

As the value of all things goes it is a function of buyers and sellers. When you have buyers the price goes up. Inflation has been a winning bet since the end of the great depression. Where do we go from here. Thank you for your article Ms. Chu, I hold your opinion in high regard especially your thoughts on energy. For me, it is too soon to tell which way the scale will tip. I am in essence riding the fence. I have an internal struggle within me on this issue. I have taken positions on TIPS which have gained 5% on par in the last couple months in the face of shrinking real and core cpi's this summer. I have also taken positions in poor man's gold, and commodity stocks. These are my inflation fighters, for this however, I have a mirrored hedge in cash. For me it is always a battle to ascertain whether a trend theme is genuine or a construct of our own manipulative function. The facts are we have a tremendous amount of cash that has been force fed into circulation, we are in uncharted territory therefore it is rational to say there is a relative amount of fear regarding this fact. Fear is a byproduct of the unknown. Fear is the summation of irrational thoughts and actions surrounding a person's attempt to know the unknown. I would counter the inflation story sounds great, but, since I am only a rank amateur at economics I am hamstrung by my lack of knowledge. What is to say we don't go the opposite direction due to contracting credit. The consumer has gotten a real punch in the face and I think severely negative situations can imprint on the human psyche and behavior. I give a lot of weight to potential inflation of human needs based goods and humbly add that we need to make a place for energy on the human needs list now. So, it is food, water, clothing, and shelter... and energy. Without the expansion of credit I don't see how we grow, I wonder if we haven't seen the top of the credit expansion/inflation curve for our little chunk of history here. There is no such thing as demandless inflation, the consumer may have found religion here.

What to Buy and Why: Barron's 2009 Roundtable, Part III

naidle

you short treasuries after the next big selloff because you look for rate deterioration. Basically if you bought a treasury now and we had a big selloff that will most likely increase the par value of that T. Basically you want to short when the yield and par are at their absolute lowest, because some day along with inflation and market appreciation you will also get higher interest rates. Higher interest rates are the bain of people who do "safe haven" buying of bonds. That paltry rate they settle for basically guarantees no one will buy that issue from them at par therefore they sell at a loss or keep it to maturity and get their crappy rate. Buying treasuries now is the equivalent of buying stocks high. It's dangerous to buy fixed debt here unless you're dealing in very short term issues. If you're conservative you might want to wait for the next crap day on the markets and get yourself a few treasury TIPS.

What to Buy and Why: Barron's 2009 Roundtable, Part III

Dr Marc, oil at $147 was the short of the century. I love the short the treasuries idea I think it has play. Wear some brighter colors when you're on tv, starting to look like the bad guy from the second Bill & Ted movie.