In his Friday (Nov. 15, 2013) commentary, David Rosenberg of Gluskin Sheff gave his take on Yellenâs Senate testimony. According to Rosenberg, Yellen not only pointed towards endless quantitative easing (QE), she also indicated that the Fed will consider lowering the meager 0.25 percent it pays for bank deposits to kick start a more vigorous credit cycle; "the era of free money is alive and well," he asserted.
The result of Yellenâs nomination, and impending ratification, is that liquidity will remain friendly and will fuel risk appetite for the foreseeable future, implying that investors will be punished for at least another five years of decay, if they are overweight cash underneath Yellenâs mandate.
In essence, Rosenberg summarizes to borrow short and lend long and start going long hard assets since we will come out of the other side with inflation.
Source: US Global Investors
