Friday, February 03, 2006

Inflation's Ugly Head

So, the stock market is pouting the new unemployment figures and wage increases, and rightly so. The pundits blame coming inflation. Finally. I've been waiting for things to get heated up.

Everyone thought they had the Fed figured out. "There'll be a couple more rate hikes, Bernanke will have to do at least one, you know, to show that he's not a pussy cat. Then he'll start to ease pressure." Yada, yada, yada.

Sure, all else being equal. But as usual, all else isn't equal. BOY, markets are jittery. (I'll bet Mr. Bernanke has a few butterflies, too.) I myself wouldn't know where to put a few bucks if I had any. Real estate is topped out, the Dow is on high choppy seas, and even gold looks bubbly -- but I still like it, the 1980s price of $850 an ounce translates to something above $2,000 today, right? So maybe we'll see some more action...

Then again, bonds may go higher (if China and Japan can ever ease up on their addiction.) Oh, and CDs are rising a bit, but how long should I tie myself up, in this rising rate environment? Wait, how about investing in China and Japan? Surely their currency will have to be released soon ...

[Thanks to for the image.]

"Whoa! Wait a minute! I sound like a speculator. WHY AM I TALKING LIKE THIS? Stop it right now."

"Well, you're talking like this because the markets are so volatile, so skittish, so nervous. I know, you should be concentrating on producing something useful, like a new energy source, and you're frustrated, you can't concentrate..."

"But I'm a Wise Long-Term Investor, not a speculator..."

"Okay, so go ahead, just tell me Ms. Wise Long-Term Investor, where the heck are you going to put the bucks? Huh? Just give me a simple answer. You gunna just sit on'em 'till hell freezes over?"

"...Hmmmm....Let me think a minute."

"Make it quick, because they're rotting away in some silly underrated savings prison at the moment... Tick, tick, tick..."


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