An open letter to Alan Greenspan
Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
>The Investors Edge. Mr. Kaltbaum is also the host of the nationally
syndicated radio show “Investor’s Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts
Dear Al,
I noticed you raised rates again yesterday. In
your missive, you stated that the economy was in good shape longer-term,
notwithstanding the effect of Hurricane Katrina. Al, you obviously have not
been looking at the markets. You see, I believe the action in the market is a
great forecaster of the future. Maybe you have not seen the action in the
following RETAILERS. Just about every other RETAILER looks the same.
Very simply, underneath the cover of the major
indices holding up, there has been a mini-crash in RETAIL stocks.
Have you seen HOUSING stocks lately?
If you were just trying to prick the HOUSING bubble, I think
maybe you are starting to get the job done.
If you were trying to hurt the consumer, methinks
these RESTAURANT stocks are telling us you may be getting that job done also.
You say that "core inflation has been relatively low in recent months and
longer-term inflation expectations remain contained." Al, have you seen the
chart of GOLD?
Al, in case you did not know, GOLD has been a great forecaster of
future inflation…not to mention the fact we are paying more for everything.
And no, I have never believed the government’s inflation numbers anyhow.
Al, you are probably a great guy, but January is
not soon enough for me. You kept rates too low for too long, creating a credit
bubble and more than likely, inciting inflation…and now you are going too
far, too fast the other way. With Katrina’s and oil price’s effect, this was
the time to take a rest. Instead, you continue to throw salt in a wound.
Best regards,
Your good buddy, Gary