Interest rates vs inflation.....

There is a huge question that is brewing behind the scenes, when do we raise interest rates? Some analysts are saying we should raise them now, to avoid inflation spiralling out of control. However should the rates be raised now, we are going to throw cold water on the economic recovery, and risk the economy falling back into the recession. However should the FED wait until the economy is stronger, we risk losing buying power to inflation.

I personally think that we need to wait, as raising interest rates now would break the housing market, and cause major havoc on the financial industry which the FED has been working overtime to save. While inflation could be painful in the future, by being preemptive we are hurting the present.

- Arthur Smelyansky

Investors must be pretty desperate when they bid the market up 2% on news that the industrial production didn't cut back output as much as initially expected. It seems like everyone is trying to catch the bottom of the economy, so they can ride the recovery to the top. The problem is catching a bottom is like catching a butcher knife thats falling by the blade. Lots of blood will be shed, and many will regret it later.

My advise for now, is to buy some Treasury Inflation Protected Securities. Because if history taught us anything,is that when interest rates are at an all time low, inflation is bound to spike at some point.

- Arthur Smelyansky D.M.S.