ROSENBERG: This Email I Got Tells Me You Should Sell Bonds During The Mini-Rallies
Rosenberg thinks inflation is a "long-forgotten word in central banking parlance."
And in light of that, he published an excerpt from an email from one of a "loyal reader" that points to some anecdotal evidence:
My reserved parking place in our office building in downtown Houston just went from $379 per month to $401. That's 5.8% inflation. Seeing it everywhere - just got back from Beaver Creek, Co ski trip where I paid $115 for breakfast for four at the hotel! That gave me heart palpitations! Nearly went into cardiac arrest when I bought an individual size pizza for my son at a restaurant on the slopes that cost $27! My burrito bowl and coffee was $32!! I understand paying for convenience, but that was ridiculous. Still the restaurant was packed. Inflation and discretionary spending haven't missed a beat down here.
BTW - we were walking in the Beaver Creek Village where all the boutiques are located and my 11 year old asked me, "Dad, what's that smell?" I told him, "Son, someone is smoking pot. It is legal in Colorado now." We were both a little shocked. Then I see this article today: Bloomberg's Alison Vekshin: 'Pot Prices Double As Colorado Begins Recreational Sales.' How ironic. Inflation really is everywhere!
Keep it real!
"In other words, us these mini-bond rallies as opportunities to shed some duration risk," said Rosenberg.
Shedding duration risk is another way of saying sell bonds.
Rosenberg thinks inflationary expectations could prompt the Fed to scale back its asset purchase program at an even faster pace.