Author: Gary Harloff
Harloff to the Fed: We Need Mo Money
Disclaimer: Gary Harloff does not own VMW, AZO, HWK or BIN in this Opportunistic ETF model.
August 30, 2010: The big picture is that the Fed is promoting low interest rates and low money supply. The former is to promote bank health and low cost housing. The latter is a mystery. The low money policy means low GDP growth (low velocity) and low stock prices. The FED is afraid of inflation and is risking the double dip. The double dip recession- and new bear market- is possible but we think unlikely because Ben Bernanke is smarter than that. He earned his Ph.D. by looking into the last super-recession 80 years ago. We think the markets are near their lows and equities are on sale now. Bond investors will most likely experience a bond-bubble- bath. We like VMware (VMW), Autozone (AZO), Hawk Corp (HWK) and IESI-BFC (BIN).
