1) Very bullish for commodities IMO. Oil will hit at least $95, gold will approach $1000, and soft commodities and agriculture should do even better. 2) May well precipitate a final leg down in the dollar, culminating in widespread fear & loathing of the greenback. Whether this happens at 1.48, 1.70, or 1.95 to the Euro I have no idea. But I would not want to be long dollars for the time being. 3) Say goodbye to the bond markets. Any rallies on housing weakness should be sold. Time to lock in long-term interest rates, anyone owning non-TIPS bonds here for investment is suicidal IMO. 4) Interest-rate sensitive stocks, especially banks, mortgage cos, homebuilders should have a rapid strong run up, but IMO that will just provide a great shorting opp later. Reminiscent of the Fed rate cut in early 2001 which provided the perfect short entry in Spring of that year. 5) Stocks - I am not sure here, I'd want to see follow through for the next few days to get a sense of future direction. Either we rally hard, or the rally quickly flops and then reverses. I'm leaning towards a rally to new highs at the moment, but don't have much conviction so I am not going to be long much. 6) If you are long housing and want to sell (e.g. you own investment properties), you may have a nice 3 month window of opportunity before further bad news comes out. This will IMO be the last good chance to sell before it collapses. Overall, the Bernanke fed seems even more dovish than Greenspan. Alan is predicting a secular rise in inflation and it is hard to disagree.
Wow, how omniscient. I wonder if Alan gets NYMEX quotes. Let me help a fella out. The quote for NYMEX Dec Crude is CLZ7.
I feel the same way on this point. My business depends on the value of nickel(which has dropped 50% over the last few months). It may not see new highs, but it will definitely go up.
i already sent an email to my retirement fund administrator to transfer all remaining bond exposure to equities ASAP...
Don't be surprised to see mortgage rates move higher due to inflation jitters. This will help the banks, they can borrow low and sell dear. Yet the media played this like it was going to help americans hahaha thats not how the fed and wall street work get real.
yes completely - do you want to see a copy? To be precise my pension is largely in Global Equities and only a small portion is in Global Bonds. Today marked the bottom in rates - inflation is back and there is noone to fight it (Trichet will have bound hands due to EUR fx rate). By the way, the vast majority of my assets (which I administer) is not in pension fund. It is in commodities and real estate (not UK/US).
There is already widespread inflation, the CPI is bunch of BS. Inflation will just keep going, the dollar is in a very long term downtrend, there is no bottom there. Equities in real dollars are doomed, in nominal dollars, it may tread water until people start to jump on the recession bandwagon and sell off stocks. With gold there is a supply glut, it may only go up as much as the dollar goes down, which means it could go up a lot, but I'd rather be long euro and yen short dollar than long gold. Oil will keep going up and up and up. There is not top there
There is urgent need to put more money in our military; And Screw China and Japan; crushed the USD to the floor; so there is not market for them dump USD; Say good bye to our bonds; Senior citizen should fast raking much more debts; stop saving; spending more;