Stay Diversified - Stay Diversified

[Lysglimt]

By: Hans Lysglimt So, the cat is out of the bag. The FED will buy treasuries directly. I hope everyone realises that this is the official beginning of the end for the dollar. The dollar will be diluted out to next to nothing, in our lifetime. There is no turning back from this point, the damage [...]

More... (http://www.farmann.no/stay-diversified-stay-diversified/)

[geir]

300 billion is a trial balloon. The treasury market is far larger than that. My guess is that the effect will be neglible in the long run.

It will be interesting to see what the Chinese say to this. They will probably threaten to drop their USD holdings if Bernanke continues this policy. My guess is that it will be politically impossible for Bernanke to continue QE (quantitative easing). He is also well-aware of the risks that QE poses to the very system he is protecting. In the end, he will be dangling from a light post in Washington if he manages to destabilize the US government. I'm pretty sure that will be the last thing he wants, so he will be careful.

My 800 target on the S&P got hit yesterday, and I sold my positions. I'll stay in cash for a while and see if we roll over or rocket higher. If we rocket higher, the next place I would be looking to get short is around 875. I'm bearish on gold in the short and medium term. Gold has been slowly bleeding the last few weeks, and I think the effect of Bernanke's trial balloon will be short-lived.

[goldfinger]

Bernanke was braver than I thought. Perhaps it was a direct call from Obama.

They seems to have set and end to the "save haven" status of the dollar, therefore the inflationary effect, is far larger than I think they envisioned.

I think some silver shares, HL, CDE, could be a bargain at these prices (if inflation get really rolling).

[Lysglimt]

Geir, you certainly have been right on this uptick.
I will be following closely to see the S&P now.
I think the markets turned sour Friday, Monday will show for sure.

You might be right on gold, yet I do not sell any as I can't really see anywhere else to put money. It would be more cash, but gold is safer.

New short positions is most likely the way to go.

I might short Oslo again, did very well shorting Oslo in February. But this is a play on the oil price, and on that I have not made up my mind.