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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: roguedolphin who wrote (8296)	3/8/2008 9:51:47 AM
From: jim_p	Read Replies (2) \| Respond to of 50424

I think it's too risky to go either long or short the 20 yr bonds. I think inflation will continue to spike higher due mostly to high energy prices, food/commodity shortages and the shrinking USD, but depending on how the fed handles it from here we should go into deflation later in the year or next year. The timing will be almost impossible to predict, and so will the Feds actions. We’re still in the early stages of going from extreme leverage to extreme deleverage in the financial markets. This will create incredible opportunities in the financial markets over the next year or two. We also have not even begun to develop a new system to create and distribute credit and this process should take several years to develop and become accepted by the markets. We also have the uncertainty of what the new congress and president will do next year with taxes and foreign trade policies. If the politicians are as stupid as they claim to be in their campaigning we will end up in a 1930’s type depression. Once inflation takes hold it’s very difficult to reverse it. We may even get a once in a lifetime opportunity to go long the 30 yr bond if we get another Paul Volcker type event like we saw in the late early 80’s. Better to stay liquid and try to buy some of the depreciating assets at 50% of today’s costs in a few years and watch on the sidelines for extreme oversold or over bought positions to trade in for now. JMHO, Jim