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January 27, 2011 – Comments (3)

Added some short ETFs to Caps portfolio.  I have not added shorts in real life however as the trend hasn't turned that way quite yet.  We could be setting up for a last gasp bull run, however, and if that happens the subsequent drop will be more severe.  Any run up here is short term imho.  We will see a 20-40% correction this year in my opinion as it appears that the gov'ment is running out of powder- unless of course it decides to explicitely back high inflation as a "rememdy."  Dear Gov'ment, I (we?) prefer deflation even if that means lower asset prices for a few years.

3 Comments – Post Your Own

#1) On January 27, 2011 at 8:05 PM, SultanOfSwing (32.40) wrote:

I don't see any in your CAPS portfolio.  Another CAPS account maybe? Or perhaps you're adding tomorrow?

Anyway, I'm not sure I prefer deflation (1930s dust bowl misery comes to mind) over inflation (Wiemark(sp?) Republic - buying a loaf of bread with a wheelbarrow of bills comes to mind.)  I haven't decided which is worse.

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#2) On January 27, 2011 at 8:11 PM, bigcat1969 (81.12) wrote:

I can't see the Fed allowing deflation.  If they have to 10 times the money supply this year they will do it and near zero interest to banks to cover mortage failures will continue for years if not decades ala Japan which should prop up financial stocks.  Also commodity prices will drive up prices independant of government intervention.

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#3) On January 28, 2011 at 11:13 AM, kirkydu (91.21) wrote:

Obama said exactly what I have in the SOTU, freeze gov'ment spending, cut military a few percent, end wars and embrace a diversified energy policy to fix our problems.  Apparently that's not good enough for some.  We have to remember, demographics are very important.  In the 2020s we have another boomer size generation hitting their 20s and early 30s, that will drive demand.  All we need to do between then and now is hold the line on spending and create a transportation and energy system that allows us to cut out our oil importts.  The numbers work.

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