This article originally appeared on RealMoney.com on Sept. 4, 2014 at 2:42 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
We know there's collateral damage to any central bank intervention that's meant to drive growth or slow inflation. Always has been; always will be.
Right now, the radical actions being taken by European Central Bank (ECB) boss Mario Draghi are taking yields around the world down to levels where you can't really make money with your money using the usual fixed income alternatives. His rate cut today -- as well as his pledge to keep rates down to historic lows -- is driving money into our bonds. So, despite the strength I described earlier, the market is not getting the real spike in interest rates that we should have seen by now.
Sure, we can bemoan the Fed's largesse, as some do. Even as I think there's little inflation in the system, it really is time for the Fed to stop trying to keep rates down with its bond buying. If I were Fed Chief Janet Yellen or Treasury Secretary Jack Lew, I would be a seller, not a buyer. These rates are only available because of the deflation precipitated by the almost total lack of demand in Europe along with German insistence on inflation being stopped by any means necessary. This is the polar opposite of what Draghi wants.
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