roguespeare

So Long, Recession; Hello, Recession

Respectfully Mr. Clark, you can't have a further collapse in real estate, contracting lines of credit, 11% unemployment, and a weak dollar and have a 5% treasury yield and 7% mortgage rate. But you can have a S&P 700 and a 3% treasury because the "spring 2009 cyclical bull market" was nothing more than a correction within a long term bear market. Hold onto your shorts: our dollar will become worthless and, since oil, gold, copper, wheat, and corn are denominated in dollars, we will have a deepening recession and rampant price inflation. Buy TIPS, hold bonds, and keep some cash.

If Bear Market Rally Unfolds, Diversify Risk

Every portfolio should have at least 10% in TIPS. While most would say that we're currently in a deflationary cycle, this will turn on a dime when the currency press starts working overtime (and that would be about now). I agree that investment grade bonds should be accumulated in something like Vanguard's short term bond fund VIPSX. As for stocks, Katie bar the door, Dow 7500 at best this year.

Inflation Fears Are Overblown

Anyone who says there need be no inflation fears is wet behind the ears. This kind of MBA dance with graphs and numbers belies the obvious fact: a government that spends outrageously more than it takes in and a people willing to put up with it end up with green printed toilet paper for currency. And THAT"S inflation!