Fed has to be ‘far more aggressive … than the Street thinks,’ says Wharton’s Siegel: ‘This is too much money chasing too few goods’

MarketWatch/Mark DeCambre/1-12-2022

“Meanwhile, Siegel said that so-called TINA, or ‘there is no alternative’ (to stocks), trading will help buttress the equity markets as bonds get hit. Stocks are real assets, you just can’t hold paper assets, which are bonds,” Siegel said. The 10-year Treasury note yields 1.73% on Wednesday, hovering around its highest levels since March 2021.”

USAGOLD note: Siegel is right about the Fed’s timidity, but can it muster the will to become significantly more aggressive? A good many economists would take issue with Siegel’s long-held view that stocks are a hedge against inflation. During the 1970s, an inflationary period often cited as similar to the present, stocks were poor performers while gold and silver soared. In short, there is an alternative to stocks.

Gold and stocks price performance 
(%, 1970-1980)

overlay chart showing the performance of gold and stocks during the 1970s in percent
Chart courtesy of MacroTrends.net

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