***"Therefore, the Fed is faced with a softening housing market on the one hand, and potential inflation on the other. Since booming house prices and the conversion of these prices into ready cash was a major underpinning of the economic recovery, any weakening in this segment is likely to cause a significant economic slowdown or recession. But if the Fed stops hiking rates, inflation can well get out of hand. Although the government’s conventional statistical measures of inflation remain under control, it is evident that gold, energy and industrial commodities are soaring even as we write, while the dollar appears to be falling off a cliff. A large number of companies have started to pass these price increases along, and many more plan to do so soon. At the same time, according to ISI, 76 global central banks have announced tightenings, the same as prior to the 2001 recession. In our view all of these conflicting forces are getting beyond the Fed’s ability to control, and the chances of a soft landing for either the economy or the stock market are rapidly receding."****
The "insane proliferation" of fiat US Federal Reserve Notes all over the planet has caused the Fed's current "cunundrum".....which has been "brewing" for a long time!
The US dollar is truly a "hot potatoe" at the current time......It'll take alot higher rates I think to cause it to become "worthy of holding" instead of real assets.
A few "very smart cookies" are looking for a "fabulous buying oppurtunity" in the future for the US dollar and US bonds. It seams way,way too early for that in my opinion. But at some point it could actually be a "legitimate trade". I think those thinking that way are looking at the US Bond buying oppurtunity "post $850 gold" in 1982.
I still think the "era of re-flation" is still very "young in tooth"......but watching closely as this "historic adjustment"(that's being "nice") to our economy that has long been in the making "plays out".
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