Raise interest rates now.

Normally, I wouldn't care about the latest market hiccup. But this one is sending out ominous ripples. First is the New York Times editorial urging the Fed not to raise rates, before the Fed has even signaled that it will do so. This has all the trappings of a kid afraid of getting caught with his hand in the cookie jar.

Then there is the posturing by the liberal leaning thinkers that we are not in a real recovery because wages haven't increased. Just wait.

Inflation is something that people have forgotten about. But in 1970, the process of wages chasing prices had spiraled so far out of hand that Nixon had to impose a 90 day wage price freeze that stretched out much longer. Do real wages need to go up for workers? Sure. But the bubble trapped in the stock market by years of easing is about to boil over into a re-enactment of those same inflationary spirals.

I just thought I'd bring it up because a new generation of investors hasn't lived through this. I would almost say that its already too late, that our alternatives are runaway inflation or a new recession, but the longer the Fed waits, the worse either scenario will be. Get ready.

Submitted March 08, 2015 at 06:09PM by danellender http://ift.tt/1whWzIg