#1 long term tenet. "Given the choice between inflation and deflation the Fed will inflate."
I've said all along that the Fed would choose inflation over any kind of deflation especially during an election year. Today the Fed made that more clear than ever. After cutting 75 basis points just 7 days ago they tacked on another 50 today. The inflation genie is now about 90% out of the bottle. As expected we are heading down the exact same path as in the 70's. Make no mistake soaring inflation is in our future. Many think that because we aren't seeing double digit inflation right now that it won't happen this time. That this time is different. Hmm... didn't investors think that it was different this time in 2000. Didn't home owners think it was different this time in 05. Commodity prices especially gold is warning the folly of this misplaced hope. I've got news for you. It's never different. Human nature never changes....never!