NEWSLETTERS & RECOMMENDATIONS - JUNE 14, 2009

Fellow Friends and Traders,
 
Barron's says, "It's a pandemic, all right-a pandemic of bullishness that is sweeping stocks markets here and around the world."  Fred Hickey, a round-table panelist, notes not only is the Fed but other Central Banks are pumping money into the system like madmen. The money isn't going into the economy; it's going into asset prices. The situation is reminiscent of the past 14 years when the Fed primed the pump and created bubbles everywhere.  He further says that recently there have signs that the insanity might be ending as the $ has fallen and yields on U.S. Treasuries have risen dramatically. To short assets in the next six months would be suicidal.  He asks the big question we are waiting to have answered.  How much longer will the Chinese be willing to sit on $800B of Treasuries, $2T of mostly dollar reserves and watch our currency drop while our government spends $2 for every $1 it takes in? I think we already know the answer.

 

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