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High demand for Treasury inflation- protected securities (TIPS) shows Fed has lost control over economy and markets – stagflation hits main streets
Alan Hershey
Apr. 9, 2007
Higher energy prices, low wage growth, ineffective President, less than prudent foreign policy, third world alike underemployment, and commodity inflation are contributing towards the expanding stagflation. The Fed like in 1970s is losing respect from all the corners. The ballooning debt levels also are contributing to the problem.
The parallels with 1970s are very clear. Those were real bad days for stock markets especially the traders and investors. Dow Jones Industrial Average went nowhere between 1969 and 1982. According to some analytic models it’s déjà vu all over again.
High demand for Treasury inflation- protected securities (TIPS) conforms the stagflation theory. If that is the real underpinning in the economy, the Dow can stay between 11,000 and 13,000 for the next twenty years.
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