Search Blog
Blogroll
  • Alan Fustey
  • Becky Wong
  • Bert Griffin
  • Blair MacDougall
  • Blake Goldring
  • Brett Baughman
  • Camillo Lento
  • Chris Delaney
  • Cynthia Kett
  • Darren Long
  • Desmond Jordan
  • Don Shaughnessy
  • Doug Lamb
  • Ed Olkovich
  • Eva Sachs
  • Evelyn Jacks
  • Gail Bebee
  • Gerald Trites
  • Gordon Brock
  • Guy Conger
  • Guy Ward
  • Heather Phillips
  • Ian Burns
  • Ian R. Whiting
  • Ian Telfer
  • Jack Comeau
  • James Dean
  • James West
  • Jeffrey Lipton Fairmont Gloucester
  • Jim Ruta
  • Jim Yih
  • Joe White
  • Jonathan Chevreau
  • Kenneth Eng
  • Larry Weltman
  • Malvin Spooner
  • Mark Borkowski
  • Marty Gunderson
  • Michael Kavanagh
  • Monty Loree
  • Nick Papapanos
  • Norma Walton
  • Pat Bolland
  • Patrick O’Meara
  • Paul Brent
  • Peter Deeb
  • Peter Lantos
  • Riaz Mamdani
  • Richard Crenian
  • Richard Warke
  • Rick Atkinson
  • Rob Peers
  • Robert Bird
  • Robert Gignac
  • Sam Albanese
  • Stephane Ruah
  • Steve Nyvik
  • Steve Selengut
  • Tammy Johnston
  • Terry Cutler
  • Trade With Kavan
  • Trevor Parry
  • Trindent Consulting
  • Wayne Wile
  • Categories
    October 2013
    M T W T F S S
    « Sep   Nov »
     123456
    78910111213
    14151617181920
    21222324252627
    28293031  

    Tags

    Bonds and Bernanke

    Guy Conger

    Fed Chairman Bernanke has thrown the kitchen sink at the bond markets to keep interest rates down.
    He’s shoved the Fed Funds rate down further — and kept it there longer — than any U.S. Fed Chairman of modern times.
    He’s printed more money than any central banker since the Weimer Republic.
    He’s bought more bonds than anyone in all of recorded history.
    And he’s even tried to give the markets an extra bonus this month by promising to continue buying bonds despite the market’s expectations that he was about to taper his bond-buying extravaganza.
    In sum, he’s done many times more than any money-printing madman since the founding of the Republic — all with the explicit purpose of pumping up bond prices and hammering down their yields!
    So you’d expect that, with all these record-smashing Herculean efforts, he could have beaten bond markets into submission.
    Not so!
    Since July 24, 2012 — 14 months and 4 days ago — his entire operation has been misfiring and backfiring.
    Bond prices have gone DOWN instead of up.
    Long-term interest rates have gone UP instead of down.
    And tens of thousands of bond investors around the world have been defying the Fed Chairman like a growing flock of mocking birds.
    This isn’t just monetary theory. It’s a fundamental, real-world failure by the Fed to pass a simple smell test.
    Nor is it subtle.

    Sure, some bond investors breathed a temporary sigh of relief two weeks ago when they learned Bernanke was going to continue his bond buying bonanza for a while longer.
    But now, even that relief is fading, as interest rates have turned sharply higher again.
    Our advice: Don’t let anyone — the Fed OR the bond markets — make a mockery of your financial future.
    Keep most of your money safe. Stash it in short-term instruments that are not vulnerable to falling bond prices. Then, when I give you the signal that rates have reached a peak, be ready to lock in some of the best yields in decades.

    The MONEY® Network