Mon 18 Jun 2007
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This past Friday I got called on OIH at $170 and GDX at $39 so I pocketed $1300 and am now sitting in 100% cash. This is all part of the plan since I’m concerned about end of the month’s Fed meeting. I have been waiting for an interest rate hike and I suspect we’re getting close to one. Once that happens, the markets are going to tank. The 10 year Treasuries have been spiking up and this is a bad warning sign.
I’m sitting high and tight in cash until something happens with Treasuries or the Fed meeting. My return for the past 30 days was 3% so I’m happy and met my goal.
June 18th, 2007 at 1:03 pm
I dunno. The info I have seen points to the FED keeping rates still. If their was any way to sanction it, I’d offer you a $1000 even money bet on the fed not raising rates.
June 18th, 2007 at 6:28 pm
Here’s the problem. The Fed can’t lower rates because it’ll send the dollar into a plunge and cause all foreign goods to cost more, result: higher inflation.
Problem #2. The world is awash in printed money. The printing presses have been going non-stop for years and they haven’t slowed down now. Result: higher inflation.
Problem #3. Gold is still above $600 which is a good canary in a coal mine. Status: inflation high.
Problem #4. Oil prices spiking higher and higher. Result: higher inflation.
Problem #5. Demand for ethanol is driving up food prices higher. Result: higher inflation.
Problem #6. Bad weather is hurting US crops. Result: higher inflation.
The only deflation out there is in computers and LCD TVs, everything else is continuously more costly. Inflation is still out of control in my opinion which is why the Fed always talks about inflation being their primary concern.
The Fed may not raise rates in June but they’ll have a chance in August, September, October, or December.