February 2011

With The ‘Nank in the hot seat on Capitol Hill Wednesday, our good friend Doug – “the savviest financial advisor we know”  – called to ask whether we were seeing any signs of a paradigm shift on our charts. That would be logical, he said, since the Fed Chairman appeared to be preparing his Congressional inquisitors and the news media for nothing less than The End of Quantitative Easing. Our own reading of Mr. Bernanke’s intentions, based on news reports, was that he was preparing us for more of the same, although he did pay lip service to the idea that, at some point, the Fed would have to tighten. Dow Jones wire service paraphrased him as follows: “[Mr.] Bernanke…sought to reassure lawmakers the Fed wouldn’t allow inflation to take root in the U.S. by waiting too long to tighten monetary policy, but gave no indication he is ready to do so right now.”  Although The ‘Nank’s bloviations were much less opaque than the cryptic double-talk we used to hear from Mr. Greenspan, they didn’t provide much reason for us to think that monetary austerity is about to become an actual policy option any time soon. » Read the full article