inflation 2013

BREAKING: Bernanke to Continue Controversial Bond Buying Program

Fed Chairman Ben Bernanke announced in a press conference this afternoon that the U.S. Federal Reserve will continue quantitative easing, the controversial bond buying program, for now. Chairman Bernanke expressed concern over rising borrowing costs and their effect on the economy, saying that the situation calls for continued quantitative easing.

Analysts on and off Wall Street were surprised, to put it mildly. Markets responded very well to news of continued easy-money policy. The mainstream consensus was that the Fed would begin to taper off its $85 billion monthly bond purchases by around $10 or $15 billion each month. Current pricing just didn't take continued bond buying into account, and the bullish reaction was immediate, intense, and widespread.

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The Best Investments to Hold When Interest Rates Rise

Pears

Inflation can be tough to contend with, yet investors should guard against inflation lest it eat away at their portfolios - which isn't hard to do if they know the best investments to hold when inflation rates rise.

Official interest rates are notoriously unreliable - outright false at times - which can downplay or underestimate the situation. Don't trust the numbers. Make that mistake, and your investments' value can evaporate before your eyes.

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The Misunderstood Link Between Oil, Natural Gas and Inflation

Energy prices, particularly oil and natural gas, are no longer a direct driver of inflation. Oil and gas prices have been resilient in the absence of inflation.

The deeper reason for the upward move in prices has been the Fed's easy money and low interest rate policies.

Oil and gas are giving investors greater leverage to make profits in upcoming market gyrations. Dr. Kent Moors explains.<

Why Veteran Trader Says Inflation in 2013 Is Imminent

Currency USD inflated no shadow

Is a spike in the monetary base - currency in circulation plus bank reserves at the Fed - the first sign of imminent inflation?

Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation.

Monetary base, sometimes called high-powered money, is the basis for the bank lending that drives our economy. When interest rates are normal, banks use their reserves for lending.

Unfortunately, these are not normal times. The U.S. Federal Reserve and other central banks around the world continue to hold interest rates at zero.

Zero interest rates mean zero returns. Investors don't get paid for investing. Banks don't get paid enough interest to compensate for the risk of lending money into the economy. Looking at it another way, there is no penalty for doing nothing with your money.

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