Beating Inflation

Every piece of inflation news has the power to terrify and send investors searching for ways to protect wealth.  Bonds look like a poor prospect.  As the Federal Reserve (Fed) raises interest rates, bonds will lose value simply as a matter or arithmetic.  (For an explanation see this post.)  Even if the Fed were to cease its counter-inflationary effort, …

Market Prospects Darken

Stocks have lost a lot of ground of late.  In the last month, the most used stock index, the S&P 500, has dropped over 10 percent.  Volatility from one day to the next is sufficient to unnerve even the most cold-blooded investor.  What may be still more upsetting, the Federal Reserve (Fed) has promised to constrain credit and …

The Federal Reserve Raises Interest Rates

After pursuing an easy money policy for years, the Federal Reserve (Fed) has finally made a change.  A recent statement announced four essential moves: The Fed would end its program of adding liquidity to markets in which it directly bought securities –– what policy makers call “quantitative easing.”It has raised the rate on the benchmark federal …

The Last Great Inflation and What It Says About the Present One

With inflation now firmly in the headlines (and in our lives), a look back at the last experience with this menace may offer needed perspective.  Of course, history never repeats exactly, and there is no claim here that it will.  Nonetheless, a look back will provide ammunition to counter much of the nonsense appearing in the media …

Who Gains from Inflations?

The Federal Reserve (Fed) has at last acknowledged inflation, and it is taking steps – albeit very preliminary ones – to deal with it.  Governments in other countries have admitted possible inflation problems, but most have taken no action.  Unless the inflation in the U.S. goes away on its own (highly unlikely at this  point), Washington will have …