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We'll Tell You When It's Time to Tap Tesla

A week ago today, in a strategy story aimed at helping you survive and thrive in today’s whipsaw markets, Chief Investment Strategist Keith Fitz-Gerald told us to put Tesla Motors Inc. (Nasdaq: TSLA) on our “watch lists” for a likely future purchase.

“BP, Tesla is a definite ‘shopping list’ stock,” Keith told me back then. “We’ve been nibbling at it here, and have played it successfully several times. But it’s not yet at the point where I’m ready to jump all the way in. I think my rationale behind Tesla remains upbeat. I mean, you’ve got a real winning combination here – a disruptive sales model, a CEO who’s the most innovative guy on the planet, all the capital in the world that can be brought to bear. I don’t give a rat’s [tail] that New Jersey won’t let the company sell its cars there. There are much bigger opportunities. Wait ’til you see what the company does with China.”

Sometimes I think Keith has a “crystal ball” in his hip pocket…

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    Expect Bernanke, Fed to Again Downplay Threat of Inflation

    Caught between a weak economy and the threat of inflation - two problems that argue for opposite solutions - the Federal Open Market Committee (FOMC) has little choice but to essentially stand pat at the culmination of its meeting today (Wednesday).

    Faced with that challenge, it's likely that U.S. Federal Reserve Chairman Ben S. Bernanke will maintain his established course of downplaying the growing threat of inflation and making only minor policy adjustments.

    Most economists expect the Fed to maintain its historically low federal-funds rate at the 0% to 0.25% level where it has been since December 2008 and end of the $600 billion bond-buying stimulus program known as quantitative easing (QE2) as planned.

    Meanwhile, the prospects for a third round - QE3 - appear very dim, at least through the rest of 2011.

    "I expect the Fed to maintain the low interest-rate environment, with no hint of any change to policy either," Frank Lesh, broker and futures analyst with FuturePath Trading, told Forbes.

    Despite $2.79 trillion in various Fed stimulus programs over the past two years, U.S. unemployment has ticked back up above 9%, and gross domestic product (GDP) growth slumped to 1.8% growth in the first quarter.

    Meanwhile, the massive infusion of money into the economy has jump-started inflation. The consumer price index rose 3.6% year-over-year in May - its fastest pace since 2008.

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  • Threat of Inflation