It's not that some form of economic stimulus isn't or wasn't necessary. Rather, it's the fact that neither party could agree on where to tighten the government's fiscal belt. Erskine Bowles, co-chair of Obama's deficit commission, put it this way: "I'm deeply disappointed that we have this short-term deal and it's not linked to long-term fiscal restraint."
Possibility No. 3 -- Bond yields soared on higher U.S. inflation
Of course, this one's all in the definition. The Federal Reserve likes the Consumer Price Index and it also likes core CPI to exclude food and energy. Yet most Americans look at the price of gasoline, coffee, health care, college, food at the grocery store and thinks, "My dollars aren't stretching as far as they used to."Enter Peter Schiff, an outspoken financial personality who believes inflation is the reason for rising bond yields -- inflation that is instantaneously created when the Fed electronically prints money. QE2, then, would be Schiff's explanation for the sudden rise in bond yields. However, Schiff thoroughly disputes the notion that you can exclude food and energy over time, and that anyone looking at commodity prices from metals to agriculture to oil recognizes that inflation is very real. Schiff-like thinkers should stick with resource-related assets that act as inflation hedges, from gold (GLD) to silver (SLV) , as well as a dollar bearish fund like PowerShares Dollar Bearish (UDN).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV