In a personal e-mail to John Talbott, he recommended TIPS. Because he believes the government CPI numbers. Here is his defense of the CPI: “I don’t think CPI is perfect, but it is hard to believe it is far off or else all bond investors are being fooled by it. Remember, they are lending money at 5% which doesn’t get much of a real return if you are right about inflation levels. ” Needless to say, I ignored this advice.
Since Talbott is wrong about CPI, his investment advice is useless to me.
If I met an economist whom I trust on all points, then I would consider his advice. Roubini is the only economist who fits the bill for me. He is the first economist who sees the big picture, and who forecasts everything that I believe PLUS more. So I look up to him, but not to Thornberg.
Even the guys in the Bubble Bloggers, like Tim Iacono, are bullish on commodities and don’t want to acknowledge that commodities will go down in the global recession. All you have to do is look at the commodities prices in the 2000-01 recession, and see the big price drops. Likewise, Jim Rogers is just a salesman for his commodities index fund, so I wouldn’t implicitly trust him either. In my opinion, he is wrong about the commodity bull market. How can you have a commodity bull market in a global recession? Maybe after the recession? Anyone buying commodities ought to wait until the bottom of the pricing, at the end of the recession. Perhaps that is a good time to get in on commodities, before the next boom.
