Apr 17, 2015
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“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
- Mark Twain
Reality has a way of interfering with what we actually believe, especially as investors. A prime example is the revolution in global monetary policies combined with unexpected deflation. The thesis that loose monetary policy by a central bank would lead to unbridled inflation has been buried by actual events, at least temporarily. Since the crisis of 2008, the 30 year US Treasury has traded between 2.25% and 5% reflecting that inflation has at least temporarily disappeared. 30 Year Treasury Yields 1994 - 2015 (TYX)
- Graph courtesy of Bloomberg L.P.
5 Year CPI Chart (CPI YOY)
- Graph courtesy of Bloomberg L.P.
This week’s program explores important implications for investors: Is it possible that the Federal Reserve and European Central Bank have navigated the past 6 years correctly? Earnings season: Saved by the financial company?
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