Originally published February 15, 2018.
Surprise! When there’s too much money created by central banks, inflation is the obvious byproduct. This isn’t rocket science, although bankers have the ego to believe that it is.
Pure and simple, inflation is a monetary event. Picture a car flooded by too much gasoline—it doesn’t work—and you realize the predicament investors are in thanks to the Federal Reserve.
It’s why you keep your bond maturities short-term and hold on to your GNMA.