No. of Recommendations: 3

I'm frankly at a loss. Let's face it: plenty of folks buying 10 year treasuries for a lot less than 4.7%, and they were buying 5 year treasuries for under 3% (may again if the current stock rally blows up).

I see both deflationary pessures and inflationary ones.

There was an interesting local news piece out of Northwest Michigan about how there was a kind of dissonance in consumer behavior: on the one hand buying houses and cars and other bid ticket items (to furnish their houses), on the other hand buying $10 wine instead of $20 and eating out more cheaply, in not less often. I don't find this dissonance at all. Zero percent financing and low mortgage rates make the big ticket items attractive. Plus, if you are buying things you were going to buy soon anyway, just earlier to take advantage of good deals, that makes sense. So does saving on unnecessary extravagences. That's what we're doing. But the implication is, consumers are downsizing, and the big ticket purchasing is going to slow.

On the oher hand, there's the deficit.

My immediate problem is that my procrastination strategies are gone. By reducing cash flow to near zero to get CDs at 5.5% while they lasted, and buying almost everything on our budget plan through 2004 (except the new roof, and the snow has just begun), and reluctantly dripping little bits into 5.1% and 5% CDs over last couple of months, I've not had any money. Time has run out: do I accept current 5-year CD rates and keep dripping? do I stay with money market and hope things will inch up in a few months? do I go with a 2-year CD, since that's a reasonable time line by when we should know which evil turn the economy is taking, but then I lose 1.4% interest for 2 years while I wait. Of course, I refuse to trade, and I see no options that are more attractive than CDs, including accelerating my drip into the SA fund, since stock prices have gotten too hot, too fast for even a balanced fund to look good.
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