The View From 1776

Beware Bernanke’s Baleful Binge

The probability of severely damaging inflation is too great to ignore.

In a Wall Street Journal article dated December 26, 2009, (A Savvy Bond Man Bets Big on Inflation) reporter Jeff D. Opdyke writes:

Bill Tedford is encouraging investors to bet against remarks by Federal Reserve Chairman Ben Bernanke, who told a group of Washington-area business leaders this month that “inflation could move lower from here.”

For more than 20 years, Mr. Tedford has run a benchmark-beating bond portfolio for Little Rock, Ark.,-based Stephens Inc. [not widely known in the general public, because it chooses to be a low-key firm, but one of the nation’s largest investment banking firms, measured by its net worth].  And though Mr. Bernanke sees slack in the economy that could push inflation down, Mr. Tedford says inflation already is evident in the consumer-price index and will lurch higher in 2010 and 2011.

He and Stephens have begun encouraging clients to invest more money in timber, oil and gas, agricultural commodities and industrial and precious metals