David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

The Butterfly Effect

August 23rd, 2013

In our previous commentaries, we discussed the Fed’s latest buzzword “tapering,” and how it relates to a correction in bond prices over the past few months.  The easiest way to think about interest rates is as the prevailing market “price” for borrowing and lending money.  The Fed’s open-market bond purchases (what we’ve come to know as various iterations of “quantitative easing”) are explicitly designed to boost liquidity and lower interest rates.  Therefore, quantitative easing distorts the true cost of money, reverberating across the globe in subtle ways which are now becoming apparent. Read the rest of this entry »

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