Friday, December 25, 2009

Inflation is a coming!

At least somebody is getting it right.

Federal Reserve Chairman Ben Bernanke told a group of Washington-area business leaders earlier this month that "inflation could move lower from here." Bill Tedford is encouraging investors to make the opposite bet.

For more than 20 years, Mr. Tedford has run a benchmark-beating bond portfolio for Little Rock, Ark.,-based Stephens Inc. And though Mr. Bernanke sees slack in the economy that could push inflation down, Mr. Tedford says inflation already is evident in the consumer-price index and will lurch higher in 2010 and 2011.

He and Stephens have begun encouraging clients to invest more money in timber, oil and gas, agricultural commodities and industrial and precious metals—historically good places to be amid rising inflation.

"The alarming part," Mr. Tedford says, "is the possibility that inflation could explode beyond the numbers we're looking at."


Anonymous said...

I think there will be inflation, but the Feds need to sell about 2.55 trillion in us debt and there isn't enough money in the to absorb that amount. Increasing interest rates to attract the capital will be costly and threaten the recovery. So you think there will be a QE 2.0?? Anyways I'm long china and commodities :)

Anonymous said...

Any thoughts on Citi? Thanks.

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